Define "dual agency" in real estate.

Dual agency occurs when a real estate professional represents both the buyer and the seller in the same transaction. This arrangement can create a unique set of challenges, as the agent must navigate the interests of both parties simultaneously, often leading to potential conflicts. In a dual agency situation, the agent has a fiduciary duty to both the buyer and seller, which requires full disclosure and careful management of the respective interests to maintain fairness and transparency.

This situation can arise in various Real Estate transactions, and it is crucial for the agent to ensure that both parties are fully aware of the implications of this arrangement. The agent's effectiveness in maintaining confidentiality and loyalty to both clients becomes vital to ensure a smooth transaction. The acknowledgment and consent of both parties are typically required for dual agency to be valid.

In contrast, the other options describe scenarios that do not constitute dual agency. For example, representing only the buyer or seller would mean that the agent is acting in a single agency capacity, while multiple real estate firms would discuss cooperation between different agents rather than a single agent representing both sides in the same transaction.