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The assertion that a single agency cannot represent both a buyer and a seller in the same transaction is grounded in the concept of agency relationships in real estate. In a single agency relationship, an agent owes loyalty and fiduciary duties to only one party—either the buyer or the seller. This is designed to prevent conflicts of interest and to ensure that the agent can fully advocate for the client's best interests without dividing their loyalty or compromising their duties.

In contrast, dual agency occurs when a single agent represents both the buyer and the seller in the same transaction, which can lead to inherent conflicts of interest. For instance, the agent may struggle to negotiate effectively on behalf of both parties because the interests of buyers and sellers are often opposing. To practice dual agency legally, specific disclosures and consent from both parties are required, emphasizing the challenges and limitations imposed on the agent's ability to fulfill fiduciary obligations.

Since the question focuses on a single agency's capabilities, the correct answer recognizes that single agents do not engage in dual agency, preventing possible ethical dilemmas and conflicts that could arise from representing both sides. This understanding is crucial for maintaining professional standards and protecting clients' interests in real estate transactions.