In what situation is dual agency typically avoided?

Dual agency is typically avoided in situations where there is a conflict of interest. In a dual agency scenario, a broker represents both the buyer and the seller in the same transaction. This arrangement can lead to complicated situations where the broker may struggle to remain neutral and provide fair representation to both parties due to competing interests.

When a conflict of interest arises, it can compromise the broker's ability to negotiate effectively for each client, as the goals of a seller (to sell for the highest price) may fundamentally conflict with those of the buyer (to purchase at the lowest price). If the broker cannot advocate wholeheartedly for one party without disadvantaging the other, this creates ethical dilemmas and potential breaches of fiduciary duty. Thus, to maintain the integrity of the real estate transaction and the professional responsibilities owed to each client, dual agency is typically avoided in situations defined by conflicting interests.

The other scenarios presented do not inherently lead to a conflict that would undermine the broker's ability to act in the best interests of both parties involved. For instance, representing a single seller or managing a large number of listings does not automatically result in conflicts, and a hot market may affect strategies, but does not inherently make dual agency problematic.