What does "undisclosed dual agency" imply in real estate transactions?

"Undisclosed dual agency" in real estate transactions refers to a situation where an agent represents both the buyer and the seller without informing either party that the other is also being represented. This practice raises significant ethical and legal concerns because it conflicts with the agent's duty to represent the best interests of each party. By not disclosing this dual representation, the agent compromises their obligation to fully advocate for their clients, potentially leading to conflicts of interest.

This concept emphasizes the importance of transparency in real estate transactions. Agents are required to disclose their role in transactions to maintain trust and uphold fiduciary duties. Without this disclosure, clients may be unaware of the potential for divided loyalties, which could affect decision-making and outcomes in the transaction.

In comparison, the other options do not accurately capture the essence of undisclosed dual agency. Representing one party openly implies a single agency scenario, acting as a neutral party suggests a lack of loyalty or advocacy towards either party, and being the sole representative without duplication indicates a clear, singular agency role, which is contrary to the concept of dual agency.