What is dual agency in real estate? When the listing agent offers to write up your offer on a home you love, it sounds convenient. However, whether you have already spoken with a real estate attorney in San Francisco or you are just starting to research your options, you will need to know how this dual-representation arrangement works.
This guide from Furukawa Castles Karic LLP breaks down what dual agency means under California law so that you know which questions are worth asking before you sign.
What Is Dual Agency in Real Estate?
Dual agency occurs when one brokerage represents both the buyer and the seller in the same real estate deal. It can happen when a single agent works with both parties, or when two agents who work under the same brokerage each handle one side. Some states restrict or prohibit dual agency, but California allows it with specific disclosure rules.
The Duties a Dual Agent Owes Both Sides
In a typical sale, real estate agent representation comes with fiduciary duties and obligations to the client, including loyalty and the honest disclosure of material facts. A dual agent owes these duties to two parties whose goals often pull in opposite directions. Buyers may want to pay less, and sellers want to receive more, so conflicts of interest can easily arise.
To address this tension, Section 2079.21 of the California Civil Code limits what a dual agent may share, such as a party’s financial position or motivation. The agent still has a duty to disclose known material facts about the property, such as defects.
How California Handles Disclosure and Consent
California’s agency rules appear in Civil Code sections 2079.13 through 2079.24. Under Section 2079.14, agents must provide a written disclosure explaining agency relationships. Section 2079.17 requires the relationship to be in the purchase agreement or a separate writing.
These steps are meant to ensure buyers and sellers give informed consent before the deal moves forward. Many local agents use a standard form from the California Association of REALTORS® for this purpose.
Questions To Ask Before You Agree to Dual Agency
While the convenience may appeal to you, review the risks and disclosures of dual agency carefully before you decide. Consider raising these points:
- Who does the agent, or the brokerage, represent?
- What information stays confidential?
- How will negotiations work?
- What alternatives exist?
If you’re curious about a lawyer’s role in this arrangement, this overview answers the question, “What does a real estate attorney do?”
Navigating Dual Agency With Furukawa Castles Karic LLP
The answer to “What is dual agency in real estate?” comes down to one brokerage owing duties to both sides of a deal. California permits this with written disclosure and consent. Our guide to contingency clauses in real estate contracts may also help as you review the other terms of your agreement.
If you have questions about your San Francisco real estate transaction, consider contacting Furukawa Castles Karic LLP at (415) 510-2823.