What does the term "dual agency" refer to in real estate?

The term "dual agency" refers to the situation in real estate where a single agent represents both the buyer and the seller in a transaction. This unique arrangement allows the agent to facilitate communication and negotiations between both parties, leading to a potentially more streamlined process.

Understanding dual agency is crucial because it raises specific ethical and legal considerations. The agent must balance their responsibility to both parties, ensuring fair treatment and transparency while navigating any potential conflicts of interest. In many jurisdictions, including Virginia, agents are required to disclose the dual agency relationship to both the buyer and the seller and often need their consent to proceed.

The other options do not accurately define dual agency. The incorrect options suggest representations that either involve multiple agents or transactions, which do not capture the essence of dual agency itself.