PSI Oklahoma Real Estate Practice Test

What does the term "Dual Agency" imply in real estate transactions?

1. The broker can represent both buyer and seller

2. The broker can represent only the seller

3. The broker can only represent the buyer

4. The broker needs written consent to represent both parties

The correct answer is: The broker needs written consent to represent both parties

The term "Dual Agency" in real estate transactions refers to a situation where a broker represents both the buyer and the seller in the same transaction. This arrangement requires clear communication and consent from both parties, typically documented in writing. This ensures that both the buyer and the seller understand the implications of dual agency, including potential conflicts of interest. In states like Oklahoma, applicable laws require that dual agency be disclosed and that both parties provide informed consent, which is what is meant by needing written consent. Without such consent, the broker would not have the legal right to act as a dual agent, as this could lead to misunderstandings and potential violations of fiduciary duties. Options that suggest exclusive representation of either the buyer or the seller do not accurately describe dual agency, which inherently involves representing both parties, albeit with certain restrictions and obligations that safeguard both clients' interests. Thus, understanding the nuances of dual agency is essential for compliance with real estate laws and for fostering trustful relationships between brokers and their clients.