What is required for a broker to represent both buyer and seller?

A broker must obtain written permission from both the buyer and seller to act as a dual agent in a real estate transaction. This written consent is a crucial aspect of dual agency, as it establishes that both parties are aware of and agree to the broker representing their interests simultaneously. The need for written permission protects the interests of both parties and ensures transparency and accountability in the transaction.

While oral agreements may seem sufficient in informal situations, they are not legally binding in this context and lack the clarity and formality that written agreements provide, especially when considering the potential conflicts of interest that can arise in dual agency scenarios. Broker discretion is insufficient because the law requires explicit consent due to the complexities and potential ethical dilemmas involved in representing both sides. Furthermore, while the Texas Real Estate Commission (TREC) regulates broker conduct and dual agency practices, it does not grant approval directly; instead, it sets the standards, which must be adhered to in the form of proper consent from the parties involved. Thus, the requirement for written permission stands as central to ethical real estate practices in dual agency situations.