An Arlington circuit court judge has exonerated Northern Virginia real estate agent and Republican activist James H. McMullin of charges that he failed to disclose his personal interest in an aborted 1977 Ballston-area real estate transaction.

The decision by Judge Charles S. Russell reverses a finding by the Virginia Real Estate Commission, which had fined McMullin $2,000 and ordered his license suspended.

The commission, a semijudicial state agency, had charged that McMullin attempted to represent both buyer and seller in the transaction without telling either side about his dual role.

McMullin, 60, president of Real Estate Services Inc., chairman of Arlington's Economic Development Commission and adviser to the county board's Republican majority, appealed the commission's decision on grounds that its findings were based on insufficient evidence. McMullin, who will resign as head of the development commission at the end of this month, has denied any wrongdoing in the transaction.

He was accused of secretly arranging to buy a Ballston house while his firm was acting as a broker for the sale. McMullin contended that while a firm he owns was to have received title to the property, it merely would have held it as trustee for a Florida-based investor.

The sale, involving the home of Roger and Mildred Marquis at 1034 N. Quincy St., failed to go through when the Marquises refused to sign the settlement contract.

The stucco bungalow, located about a quarter-mile from the Ballston Metro stop, is adjacent to a high-rise apartment building partly owned by McMullin. sRoger Marquis, a retired Justice Department official, testified at a commission hearing that he and his wife had decided in 1977 to sell the house and move to Florida because of ill health.

They had protested the construction of the neighboring apartment building, and said they were adamantly opposed to selling their house to anyone with whom McMullin might be involved.

McMullin learned the house was for sale through a multiple listing service to which his firm belongs.

According to documents filed with the commission, McMullin suggested that Arlington businessman Frank Kaufman purchase the home and turn it over to a management company of which McMullin is sole officer and stockholder.

McMullin's attorney contended, however, that McMullin had called a Florida investor represented by Kaufman to tell him the house was "not a good investment" but might be a "good defensive purchase to protect" the neighboring apartment.