Final answer:
Dual agency is a real estate transaction scenario where both the buyer and seller are represented by the same broker, which requires informed consent and careful management due to potential conflicts of interest.
Step-by-step explanation:
Dual agency is an agency relationship wherein both the buyer and the seller are represented by the same broker in an in-house real estate transaction. Dual agency can occur when one agent represents both parties or when two agents from the same brokerage represent each party, with the agency's broker standing in as the dual agent. This arrangement requires the informed consent of both the buyer and the seller, and it presents unique challenges and potential conflicts of interest that must be carefully managed. In some locations, dual agency may be subject to specific regulations or even prohibited.