Real Estate Agency Relationships
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Buyers and sellers of real estate are often confused about the role of real estate agents, whom the agents represent and real estate agency relationships. California requires that agents give buyers and sellers an agency disclosure form to sign.
Remember, the "For Sale" sign in the yard is the Listing Agent; he/she works for the seller, so if you are interested in the property and call the agent, it is highly recommended that you do not let them represent you for that particular property. It is impossible for them to look after both your and the seller's best interest. I advise any buyer to use a Buyer's Agent. They work for YOU!
Single Agency
Buying agents who represent buyers are working in a single agency capacity as a buyer's agent, aka Selling Agent (I know, it gets confusing!). Seller's agents who represent sellers are working in a single agency capacity as a listing agent.
Agents who represent clients under single agency owe a fiduciary responsibility to the client. They cannot share confidential information with the other party or the other party's agent. Single agency agents must use care and due diligence to perform duties, disclose all material facts and be honest.
Buyer's agents and the buyer generally sign a buyer's broker agreement, which lays out the duties and obligations of the agent.
Seller's agents and the seller sign a listing agreement, which also lays out the duties and obligations of the agent. Listing agents and buyer's agents each owes the client loyalty, confidentiality and accountability.
Many agents work as buyer's agent with buyers and as a seller's agent with sellers. However, some agents work solely as exclusive buyer's agents and never, ever take a listing.
Dual Agency With Two Agents
Because all real estate agents are licensed under a real estate broker, it is possible to work with one agent who is licensed by the same broker as the listing agent. This situation creates a dual agency. The agents could work at separate offices and be strangers to each other, but since they are licensed by the broker, they are still operating under dual agency if one agent represents the buyer and the other represents the seller.
Starting out, an agent may have created an single agency relationship with the buyer, but when the buyer chooses a home listed by that agent's broker, the agent's relationship with the buyer changes. Not all single agents note the distinction. In the real world, most of these dual agents talk the talk of dual agency but continue to walk the walk of single-agency representation.
Dual agency must be agreed to in writing between the parties. In California, exclusive buyer's broker agreements contain verbiage that allows dual agency, so most buyers don't realize their buyer's broker could be subject to dual agency. Only exclusive buyer's agents are never dual agents.
Dual Agency With Same Agent
A listing agent who also represents the buyer is a dual agent. Dual agents cannot operate in a fiduciary relationship with either party and must treat both sellers and buyers equally. They cannot share confidential information but they cannot give confidential advice.
It is very difficult to obtain the highest and best price for the seller when the agent also represents the buyer. The dual agent cannot advise on home price, terms, nor negotiate on anyone's behalf.
Joseph Dodge, Your Exclusive Real Estate Agent
For more information on Real Estate Agency Relationships, please contact Joseph Dodge. As your Southern California real estate broker, you can be assured that we will always look out for your best interests. Please call or email today, and we'll be happy to assist you throughout your real estate transaction.