Maine Real Estate License Practice Exam

What is required for a licensee to legally represent both a buyer and seller in a real estate transaction?

1. Written consent from both parties

2. Disclosure of dual agency

3. Separate agents from the same brokerage

4. A transaction coordinator

The correct answer is: Disclosure of dual agency

The requirement for a licensee to legally represent both a buyer and a seller in a real estate transaction hinges fundamentally on the concept of dual agency. In many jurisdictions, including Maine, dual agency occurs when a single real estate licensee represents both parties in the same transaction. For this arrangement to be lawful, the licensee must disclose the dual agency status to both the buyer and seller. This disclosure is essential because it ensures that both parties are aware that the licensee will be balancing the interests of both the buyer and the seller, potentially leading to a conflict of interest. By disclosing dual agency, the licensee provides transparency in the relationship, allowing both parties to make informed decisions regarding their representation. This is a critical legal and ethical requirement that helps protect the interests of all parties involved. While written consent from both parties is typically needed in conjunction with the disclosure, the primary legal foundation for representing both is the disclosure itself. The other options, such as having separate agents from the same brokerage or employing a transaction coordinator, do not directly address the legal requirements for dual agency representation.