The four types of agency Relationships discussed in the disclosure form are

What is a Dual Agent?

The next paragraph explains Dual Agency. A "dual agency" situation is one in which the same agent represents BOTH the buyer and the seller on the same transaction.

Although some states have outlawed dual agency, it is currently legal in the state of California for an agent to represent both the buyer and the seller in one transaction, so long as both the buyer and the seller are aware of (and have consented to, in writing) the dual agency situation.

Is this the situation you want to get yourself into? Of course not! How can ONE agent negotiate the BEST price and terms for the seller and, at the same time, negotiate the best price and terms for the buyer? It's impossible... Because the buyer and the seller have competing interests. And it's OK that they have competing interests. It's just the way it is. 

Now do you understand why California requires this disclosure to be given to California home buyers?

In fact, it's actually a federal law that every state must require their real estate agents to make this sort of disclosure.

Dual Agency presents a conflict of interest in which the role of the real estate agent is reduced to that of a "transaction facilitator"... rather than truly advising their client and being able to look out for their client's best interests. And isn't that the main reason you are hiring a real estate agent in the first place (to have an experienced person that you trust give you expert home buying guidance and advice)?

A Buyer's Agent Who Works for a Traditional Real Estate Company Can Become a Dual Agent

You may have wondered, "What if my buyer's agent doesn't represent any sellers, but their company does? 

All real estate agents must "hang their license with" (work for) a licensed California broker.

A broker is a real estate agent who has taken extra classes, met extra criteria, and passed an extra "broker" exam.

Every San Diego real estate company has at least ONE broker, and every real estate salesperson must EITHER BE a broker OR WORK FOR a broker.

Here is where it gets more interesting: The broker is responsible for every transaction that takes place in their office, AND the broker legally represents every client that their agents are working with.

In most cases, the buyers and sellers have NEVER even met the broker... But if they are being represented by one of the broker's agents, they are actually also being represented by the broker.

This is an important concept to understand, because it changes the way you read this disclosure form.

In reality, dual agency is happening quite a bit in San Diego. Any time a buyer and seller are being represented by the same company in one transaction, it's dual agency (and the buyers and sellers tend to be the losers in these situations, in my opinion).

Even if there are two seperate "real estate agents" involved, the truth is that BOTH of those agents report to the same broker, AND both the buyer and the seller are the clients of the same broker.

Buyers and Sellers (the Consumers) Are the Losers in Most Dual Agent Transactions

Unfortunately in these situations, even when working with the nicest and most honest real estate agents, the people who lose out are the clients.

The clients lose out because they sacrifice having true agency and fiduciary benefits from working with a real estate agent who only works for them.

Now, I must also tell you that I have friends and relatives who work for large traditional real estate companies. Real estate agents who work for traditional brokerages are not bad people (perhaps some are, but the majority are not). 

Many real estate agents actually try to avoid dual agency situations by practicing single agency.

Others DO NOT try to avoid dual agency situations. They actually seek it out as a way to make more money.

The Practice of Exclusive Agency in California

A few companies have decided to practice exclusive seller agency OR exclusive buyer agency.

There are real estate companies in San Diego that ONLY represent sellers or ONLY represent buyers. A company that only represents buyers is commonly referred to as an exclusive buyer agency or exclusive buyer brokerage.

The disclosure form we reviewed in this article doesn't go into much detail about exclusive agency, but I believe it's important for buyers to be aware of their right to work with an exclusive buyer agent.

Signing the Disclosure Regarding Real Estate Agency Relationship

The last section of Page 1 explains why you are signing the form (you acknowledge receipt of a copy of the form and the section of the California Civil Code that the form refers to).

What are the 4 types of agency?

What are the types of agency relationships?

What are the different types of agency quizlet?

What is NYS agency Disclosure form?