11.23.2001 :: Real Estate News
Real Estate Agency Relationships
by Graham Morland

One of the most important disclosures in real estate is that of representation. Many buyers and sellers do not understand fully the implications of things such as dual agency or double ended transactions. This article is intended to throw some light on the subject.

There are three types of agency relationships that can exist between you and a real estate company, that represents you in the sale or purchase of real property. The three types of agency are; 1) representation as the sellers agent, 2) representation as the buyers agent, or 3) representation as both buyers and sellers agent. The last type of agency representation is commonly referred to as dual agency.

Disclosure regarding real estate agency relationships before entering into a transaction to buy or sell is required by the California Civil Code, sections 2079.13 to 2079.24.

You as a buyer or seller have a choice on fiduciary representation, and by law should always be asked by a Realtor to choose a type of agency that represents your best interests in the real estate transaction. In many cases this choice is very simple. One agent represents the seller, and another agent represents the buyers and both hold their real estate licenses with different brokers. However if the agents both work for the same broker, then the broker is representing both buyer and seller and thus a dual agency situation exists. When an agent already representing the seller of a property you are interested in purchasing asks to represent you, (assuming you do not have an agent), you are also being asked to enter into dual agency. If either seller or buyer is uncomfortable with dual agency in either case above they can request separate agency representation.

Opinions vary but it is my belief that separation of fiduciary responsibility and separate representation is important. A purchase of a property is possibly the biggest financial commitment that people make in their lifetime. Dual agency is a legal type of representation but make sure it is in your best interests. If you are in any doubt, would like a copy of the "agency relationship" legal document, or have further questions, then consult with your real estate agent or contact the author of this article.

Graham Morland is the producer of SantaCruz-RealEstate.com. He moved to the field of professional real estate after a very successful career as an executive in high technology computing. Currently the broker/owner of Sterling Properties, Graham can be reached by email at Graham@SantaCruz-RealEstate.com or by phone at 831.688.2310.