Fact Pattern: To quickly recap last week’s Legal Tip, you are the listing agent with our company. For ease of reference, your name for this Fact Pattern will be “Yew Lista.” Another agent, Aggie, from another company, Realbiz, is your co-listing agent. The buyer is represented by Baggie, who also works for Realbiz. As discussed in last week’s Legal Tip, you and our company are the Seller’s Agent and Broker, whereas Aggie, Baggie, and Realbiz are all dual agents. Baggie is now asking you (Yew) how to confirm these agency relationships when submitting the buyer’s offer.

Multiple Choice Question: What should you tell Baggie? Pick the best answer:

A. In “Agency Confirmation” in paragraph 2B of the RPA, insert all names (separated by a slash if needed), and then use a pen to draw circles and arrows to show that Yew and our company are the Seller’s Agent only, whereas Aggie, Baggie, and Realbiz are dual agents.
B. Use an Additional Broker Acknowledgment form.
C. Use an Agency Confirmation form.
D. Any of the above. 

Answer: Answer A is not wrong, but it’s not the best answer in my opinion. In paragraph 2B of the RPA, we can indicate the names of both listing brokers separated by a slash, as well as both listing agents separated by a slash. We can also mark up the form in a way that shows that we are the Seller’s Agent only, and that Aggie and Baggie of Realbiz are dual agents.

But this is an unusual situation. Those circle-and-arrow markings are likely to be confusing and easily misunderstood. Yet, this is a matter of great importance to us. We have every reason to clearly delineate that we are not a dual agent, and that we do not owe a fiduciary duty to the buyer.

Answer B is wrong. It’s true that the Additional Broker Acknowledgment (ABA) form would at least inform the parties that our company and Realbiz are co-listing brokers. But paragraph 5 of the ABA specifically states that wherever one broker’s name is indicated in the sales documents, the other broker shall also be deemed to be named. Yet, in our situation, we are specifically trying to avoid being deemed to be a dual agent, even though Aggie, Baggie, and Realbiz are dual agents.

Answer C is the best answer if done properly. First, Baggie can put Aggie and Baggie as dual agents in paragraph 2B of the RPA, and Yew on a separate, stand-alone Agency Confirmation (AC) form. Second, the separate AC form must be properly incorporated into the RPA by reference, and the fact that Aggie and Yew are co-listing agents should be explained. To accomplish that, my suggestion would be to insert in “Other Terms” in paragraph 3R of the RPA as follows: “Concerning paragraph 2B, Yew Lista with Berkshire Hathaway HomeServices California Properties is a co-listing agent/broker representing Seller only (see attached Agency Confirmation form).”

On the separate AC form, check the “is NOT” box on Line 2 to indicate that the AC does not supersede the agency confirmation in the purchase agreement. Additionally on the separate AC form, do not insert Realbiz or Baggie as the Buyer’s Broker or Agent, because zipForms will block you from checking the “Seller’s Agent” boxes for Yew at the same time as the “dual agent” boxes for Baggie.

Alternatively, instead of using a separate AC form, you can simply write out in a couple of sentences all the required agency confirmation information for Yew and our company as the co-listing agent and broker, and insert that information in “Other Terms” (paragraph 3R) in the RPA.

-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 24, 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.