Can realtors work as a double agent?

[Sam Shueh]

A break over how real estate is purchased and sold now reaches the California Supreme Court.

Those on both sides of the argument will soon know the high court's decision in the case Malibu home buyer vs.Coldwell Banker. It can affect the way real estate has been conducted.

Horiike v. Coldwell Banker Residential Brokerage Co., S218734, California Supreme Court (San Francisco).--

An Asian cash-buyer bought a Tuscan-style home overlooking the Pacific Ocean for $12.25 million in 2007. A listing agent provided him with a brochure stating the house had 15,000 square feet of living space, but county records said the residence actually was only 9,434 square feet. It did not require an appraisal and measurements were not included and there was no disclosure that buyer need to order measurements to confirm square footage of living area.

Unlike other municipalities, Malibu, California uses a different metrics where garage and spaces can be included in the primary residence areal size.

In this case, Horiike used a buyer agent and another listing agent both are from Coldwell Banker. The brokerage now is the dual agent of buyer and seller, according to court.

"A dual agency must walk a fine line, very careful not to favor the buyer or seller". The minimum acceptance price can not be discussed to give a buyer an edge. According to some folks it is like comparing a dual-agency to employ same lawyer representing opposing sides in a court.

This can be confusing at larger brokerage which have more agents. They find a buyer easier at sales meeting or prelisting internal sites. Often, two agents strike a deal even before it gets on the MLS. This has caused discomfort and give a disadvantage to other brokerages especially smaller brokers who have other buyers to represent.

California Association of Realtors (CAR) has filed its own opinion and so is National Association of Exclusive Buyer Agents who does not endorse double ended deals. Depending on the out come, dual agency in California may be indefensible in the future.

Source: Kalfus, (May 2, 2016)

[Bill Schrimpf]

@Sam Shueh - I didn't read the docket but if 2 different sales persons were involved, even under the same broker, isn't this a designated agency, not a dual agency?  A dual agency is when 1 broker handles the transaction directly or through 1 salesperson.  

This will be interesting for me to watch as NV often follows CA in these types of issues.