Fact Pattern: You are an agent with our brokerage company. You co-list a property for sale with an agent, Aggie, who works for another brokerage called Realbiz. As it turns out, the buyer’s agent, Baggie, also works for Realbiz.

Multiple Choice Question: What are the agency relationships in this situation for purposes of completing the agency confirmation? Pick the best answer:

A. You and Aggie are the Seller’s Agent only, and Baggie is the Buyer’s Agent only.
B. You are the Seller’s Agent only, and Aggie and Baggie are dual agents.
C. You, Aggie, and Baggie are all dual agents.
D. The answer depends on whether Aggie and Baggie work out of the same branch office, regardless of whether they work for the same brokerage. 

Answer: Answer A is wrong. When it comes to determining agency relationships, the law looks to the relationship between the client and the responsible brokerage, not the individual agent. After all, salespersons and broker-associates conduct licensed real estate activities solely in their capacity as representatives of their responsible broker. You may be an independent contractor for tax purposes, but you nevertheless conduct real estate business on behalf of our brokerage, and under the supervision of our brokerage.

Answer B is the correct answer. Our brokerage represents the seller only. Hence, you as a salesperson or broker-associate for our brokerage, also represents the seller only. In contrast, Realbiz represents both the seller and buyer, so Realbiz is a dual agent. Hence, both Aggie and Baggie are dual agents as well.

Agents often disagree with Answer B because, in reality, Aggie generally does the work that’s typically done by a seller’s agent, and Baggie generally does the work that’s typically done by a buyer’s agent. However, their decision to divide up their responsibilities in that manner does not change the fact that they both work for Realbiz, and that Realbiz represents both the seller and buyer. Aggie and Baggie should understand that they both owe a fiduciary duty to both the seller and buyer, regardless of how they may decide to divide up their responsibilities.

Answer C is wrong. You do not become a dual agent just because your co-listing agent, Aggie, is a dual agent.

Answer D is also wrong. The law determines agency relationship based on the brokerage, regardless of whether that brokerage has various branch offices.

As a practice tip, if you and the agent on the other side of a sales transaction both work under our Broker License ID Number 01317331, then both individual agents and our brokerage are all dual agents.

Stay Tuned! This week was the easy question! Stay tuned next week to find out how to complete the Agency Confirmation section of the RPA in this situation.

-Thank You to Rim Bayaa and David Offer (Brentwood Office) for suggesting this week’s legal tip!

Copyright© 2023 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of April 17, 2023. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals. Written by Stella Ling, Esq.