I sold a house I owned to my niece. She approached me about buying it when she knew I was starting to think about selling it. I wanted to help her out, so I picked a slightly below-market price that was lower than what she had planned on paying for other houses.
At first, we discussed that we would just get a lawyer to do the paperwork, but then we changed our minds when it became obvious that her mortgage process (with FDA program backing and requirements) was confusing to us both. So I approached the realtor who had helped me buy my own house and asked him to "run the deal" through the process.
He acted as dual agent. The transaction price was only $95,000. He offered to do it for a flat fee of $1500. I actually told him that was too low and I would pay him $2000.
In my case, I trusted my niece and she trusted me. She really wanted the house. This was a house that my mother (her grandmother) had lived in for 25 years. She was quite familiar with the house. I was very, very honest with her about every known issue with the house. She didn't even feel the need to do an inspection.
Even though there wasn't an inspection, I did have to do some fixes that were issues during the FDA-financing appraisal. I spent another $1800 to do the repairs.
I liked the fact that the agent was there to help us put the transaction through the appropriate and required steps. He took care of arranging water quality testing that was required. He took care of setting up the attorney that did the closing. He communicated equally with both sides.
So, mine was a family situation, so a bit different than yours. But in this case, I think dual agency was fine. And maybe you know your own situation and your own neighbor enough to do this.
I would not, however, do a dual agency transaction with a total stranger. I want someone to protect MY interests exclusively.
Edited to add: After reading OldShooter's comment that was written while I wrote mine, I tend to agree with him. If they approached you and you were not looking to sell, then their deal shouldn't have any commission coming out of your pocket. If that "premium" is 2.5% more than you would have agreed to, then I guess it comes out in the wash. But if not, then I would suggest the buyer covers that commission.