Chapter 1: Agency Disclosure
Part 1: Consider the following statements below. Identify whether each are true or false and provide an explanation as to why.
- In California, it’s illegal for a real estate licensee to represent both parties in a real estate transaction.
- A person can become another person’s agent without giving express consent to the agency.
- An agent is prohibited from disclosing confidential information about a principal even after their relationship has ended.
- An agent’s fiduciary duties require him to put his principal’s interests before all other interests, except for his own.
- If a buyer’s agent receives compensation from the seller, the agent must represent both the buyer’s interests and the seller’s interests in the transaction.
Part 2: Consider the following scenario and explain at which points each of the agents is required to make agency disclosures to each party.
On March 15, a property owner wants to list her home for sale. The home seller, Janet, meets with an agent from Merlin Realty. The Realtor she met with is Marco and provides a contract for Janet to sign. After which Marco lists her house for sale on the local Multiple Listing Service.
On April 19, Lena, an agent with Anyplace Realty, shows the home to a buyer she is representing. On May 1, the buyer tells Lena that she would like to put in an offer on the house. Lena prepares a purchase agreement and has her buyer sign. Lena then submits the offer to the listing agent, Marco, who presents it to the seller the same day. On May 4, Janet informs Marco that she wishes to except the offer. Marco asks Janet to sign the agreement under seller acceptance, and Lena sends the agreement back to Lena so she may confirm acceptance. The closing date will be June 12.
- When should Lena, the listing agent, give the seller a copy of the agency disclosure form (by what date)?
- When and how is she required to disclose her agency status in this transaction to the seller?
- When should Marco, the buyers agent, give the buyer a copy of the agency disclosure form?
- When and how is Marco required to disclose his agency status in this transaction to the buyer?
