What is dual agency, and what is generally required for it to be lawful?

Dual agency arises when the same agent or brokerage represents both the buyer and the seller in one transaction. Because the agent cannot give undivided loyalty to two parties with opposing interests, dual agency is permitted in most states only when both parties give informed, written consent after full disclosure, and even then the agent's duties are limited (for example, the agent may not disclose one party's confidential bargaining position to the other). Some states prohibit it or use 'designated agency' to assign different agents within a brokerage. Undisclosed dual agency is a serious violation. The national exam expects familiarity with disclosure and consent requirements.