BEST ANSWER
FIRST ANSWER
Dual Agency is created by the agent representing both the buyer and the seller.
In a dual agency transaction, when the broker acts as the agent for both the seller and the buyer, he or she is creating a transaction in which there are two principals.
Because the primary responsibility toward a principal is compromised, the law requires that a broker or agent in this dual agency role must inform both parties that they can not expect the broker's full and undivided allegiance. In other words, both the seller and the buyer must be informed that they are responsible for looking after their own interest.
According to state real estate laws, failure to notify both parties and obtain their informed consent means that the broker cannot legally claim a commission.
Tue Aug 18 2009, 09:01