February 24th, 2019 at 5:55 pm

Agents Beware! The newly revised Agency Confirmation in paragraph 2 of the C.A.R. Residential Purchase Agreement (RPA) may require a new rhetoric for explaining your role to your clients. If, as is sometimes the case, a seller wants you, as the listing agent, to represent the seller exclusively, the buyer’s agent cannot be another agent within our company. If another agent within our company represents the buyer, the Agency Confirmation in the RPA will state your individual name as the “Seller’s Agent” and indicate with a checkbox that you personally are “both the Buyer’s and Seller’s Agent (dual agent).”

Background: Effective January 1, 2019, a new law requires a new format for the Agency Confirmation in paragraph 2B of the RPA. The previous Agency Confirmation has now been expanded to include not only the names of the seller’s brokerage and buyer’s brokerage, but also the individual salespersons or broker associates representing the seller and buyer. If an individual in our company represents the seller, and that individual or another individual within our company represents the buyer, then the “dual agent” boxes must be checked, rather incredibly, a total of 4 times for Seller’s Brokerage, Seller’s Agent, Buyer’s Brokerage, and Buyer’s Agent.

We are one big happy family with almost 3,000 agents. We are dual agents as long as the individuals representing the seller and buyer both work for Berkshire Hathaway HomeServices California Properties (DRE License No 01317331) under our broker of record Dean Stalter.

Legal Authority: The newly revised format for the Agency Confirmation is consistent with the underlying law enacted decades ago. An individual salesperson or broker associate has the same duty to a seller or buyer as that of the brokerage (Cal. Civ. Code section 2017.13(a)). For anyone who may want to question the validity of that legal requirement, the California Supreme Court (the highest court in our state) recently affirmed it in 2016 in the high-profile case of Horiike v. Coldwell Banker.

Issue Presented: Regardless of the law, sellers in our day-to-day practice will sometimes voice a preference for the individual acting as the listing agent to represent the seller exclusively. That practice is also the personal preference of many listing agents who voluntarily elect not to represent the buyer. However, if you agree with the seller to that type of “seller exclusive” arrangement, you should immediately inform the seller upfront that the buyer’s agent cannot be another agent within our company, because the seller may eventually receive an offer with your name in the Agency Confirmation as “both the Buyer’s and Seller’s Agent (dual agent).”

One solution is for you and the seller to simply agree that, although you and your company may be a dual agent, you personally will communicate exclusively with the seller, and you will refrain from communicating directly with the buyer without the seller’s prior written consent. You can even add that exact language into the listing agreement as clarification. You cannot, however, agree to represent the seller “exclusively” if the seller will allow another agent from our company to represent the buyer, because that type of understanding will be directly contradicted by the language in the Agency Confirmation.

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