In our last post, we began looking at the issue of dual agency in real estate transactions. As we noted, dual agency is when the same brokerage which listed a property also represents the buyer. The practice is legal, but there are certain rules that must be followed in California and there are certain risks.
An issue currently before the California Supreme Court is how liability should be accounted in dual agencies when something goes wrong with a real estate transaction. The case involves a home buyer who successfully sued the listing agent and the brokerage for overstating the square footage of a home he had purchased in 2007.
In that case, the listing agency was found liable on appeal for failing to communicate all material information about the square footage of the home. The appeals court also said that a real estate agent working for a broker acting as a dual agent has the same fiduciary duty to the buyer and the seller as the broker. Now, the Supreme Court is being asked consider the case.
It isn’t clear yet what will come out of the case. California has established relatively strict laws when it comes to dual agency in real estate transactions, and it is possible that the court could add additional requirements when it comes to disclosure. We’ll have to wait and see.
Real estate agents can, of course, be helpful for home buyers in real estate transactions, but even when dual agency isn’t involved, real estate agents have a certain outlook and expertise. Real estate attorneys have a different set of skills and different expertise, and home buyers can really benefit from the guidance and advocacy of an experienced attorney in any real estate transaction.
Source: The Mercury News, “‘Double agent?’ A rift over how real estate is bought and sold reaches the California Supreme Court,” Marilyn Kalfus, May 2, 2016.