Washington State Real Estate Practice Exam 2026 – Complete Preparation Guide

The correct response indicates that dual agency occurs when a real estate agent represents both the buyer and the seller in the same transaction. This arrangement can create a potential conflict of interest since the agent holds fiduciary duties to both parties. In dual agency situations, the agent is required to navigate the delicate balance of representing both clients while maintaining impartiality, which necessitates careful handling of information and negotiation strategies.

In many jurisdictions, including Washington State, agents must typically disclose their dual agency status to both parties involved to ensure transparency. This requirement helps clients understand the nature of the representation and the limitations on the agent's ability to advocate fully for one side over the other.

The other agency types mentioned do not encompass this scenario. Single agency refers to an agent representing only one party in a transaction, thereby maintaining a clear and unimpeded fiduciary responsibility. Designated agency involves assigning specific agents within the same brokerage to represent the buyer and seller separately, avoiding the potential conflicts of dual agency while still allowing for representation by the same firm. Transactional agency focuses on facilitating the transaction rather than representing either party, which means the agent does not owe fiduciary duties to either side.