Oregon 30-Hour Real Estate Law Practice Test

What type of agency relationship exists when one licensee represents both the buyer and seller in a transaction?

1. Single-agent agency

2. Designated agency

3. Single-licensed dual agency

4. Transaction brokerage

The correct answer is: Single-licensed dual agency

When one licensee represents both the buyer and the seller in a transaction, this situation is known as single-licensed dual agency. In this type of agency relationship, the same real estate agent acts on behalf of both parties within the same transaction. This arrangement requires a careful balancing of responsibilities, as the agent must remain neutral and navigate the interests of both the buyer and the seller simultaneously. In single-licensed dual agency, the agent is restricted in their ability to fully advocate for either party since their fiduciary duty is divided between the two clients. This means that while the agent can help facilitate the transaction, they cannot disclose confidential information that one party may share with them, regarding negotiations or motivations, to the other party without consent. The key characteristic of this agency relationship is that it involves a single licensee representing both sides, differentiating it from other forms of agency where one party is exclusively represented. Understanding single-licensed dual agency is crucial because it highlights the ethical obligations and potential conflicts of interest that a licensee must navigate when undertaking such a role. The other choices represent different types of agency relationships: single-agent agency involves one licensee representing one principal only, designated agency allows designated agents within a firm to represent the buyer and seller separately, and