National Real Estate Practice Exam

What type of broker transaction occurs when the same brokerage represents both the buyer and the seller?

1. Dual Agency

2. Cross-Transaction

3. In-Company Transaction

4. Exclusive Listing

The correct answer is: In-Company Transaction

The scenario where the same brokerage represents both the buyer and the seller in a transaction is best described by the concept of dual agency. In dual agency, the brokerage acts on behalf of both parties with the agreement and consent of both, ensuring that the interests of both the buyer and seller are considered during negotiations. This situation can create complexities, as the broker must navigate the differing interests of both clients while maintaining confidentiality and acting in the best interest of each party. It's important for the broker to disclose this relationship to both the buyer and seller, and to obtain their consent, as it can lead to potential conflicts of interest. The term "In-Company Transaction" is not widely recognized in real estate terminology and does not adequately describe the dual representation that occurs in this scenario. Thus, understanding the concept of dual agency is crucial for recognizing how transactions are handled when a single brokerage is involved on both sides.