Agency relationships in California: seller's, buyer's, and dual agents

Identify the represented party

In California, the seller's agent represents the seller, the buyer's agent represents the buyer, and a dual agent represents both. The agent is the broker; a salesperson or broker associate acts for that broker and owes equivalent duties to the parties.

Duties and compensation

A single agent owes the principal fiduciary duties of utmost care, integrity, honesty, and loyalty. To both parties, the agent owes reasonable skill and care, honest and fair dealing, good faith, and disclosure of known facts materially affecting property value or desirability that are not known to, or within the diligent attention and observation of, the parties.

A buyer's agent can receive compensation from the seller while representing only the buyer. An unrepresented buyer does not by that fact alone make the seller's agent a dual agent.

Dual agency

California permits dual agency with both parties' knowledge and consent. A broker representing both parties through different affiliated salespersons is still a dual agent. Fiduciary duties run to both principals.

Without the respective client's express permission, a dual agent may not reveal confidential financial position, motivations, bargaining position, or other personal information affecting price. This includes a seller's willingness to accept less or a buyer's willingness to pay more. Dual-agency consent is not permission to reveal these facts. A known material property defect is different from a confidential bargaining limit; loyalty does not excuse concealing a fact subject to mandatory disclosure.

Disclosure and confirmation

Agency disclosure explains possible relationships and duties. Give it to the seller before the listing agreement and to the buyer as soon as practicable before the buyer-broker representation agreement and offer. If the buyer's agent did not prepare the offer, give disclosure no later than the next business day after receiving that offer from the buyer. Obtain a signed acknowledgment of receipt, subject to the statutory refusal exception.

Confirmation identifies actual representation in the purchase contract or a separate writing. The buyer's agent's relationship is confirmed by the seller, buyer, and buyer's agent before or coincident with the respective parties' contract execution. The seller's agent's relationship is confirmed by the seller and seller's agent before or coincident with the seller's execution. Confirmation is additional to disclosure.

Buyers and sellers remain responsible for protecting their interests and obtaining qualified legal or tax advice when needed.