Bay Area Real Estate Wiki

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====== Disclosure of Agency ======

California law requires real estate agents to disclose agency relationships in a timely manner.

===== Purpose of Agency Disclosure =====

  * Inform parties whom the agent represents
  * Avoid confusion and conflicts of interest
  * Ensure informed consent
  * Required by statute

===== When Disclosure Is Required =====

  * As soon as practicable
  * Before the principal enters into a contract
  * Prior to writing or presenting an offer, when possible

===== Agency Disclosure Form =====

  * Disclosure Regarding Real Estate Agency Relationships (AD)
  * Must be provided to:
    * Seller
    * Buyer
  * Requires written acknowledgment
  * Disclosure does not create agency by itself

===== Types of Disclosure =====

==== Seller Disclosure ====
  * Broker must disclose representation to seller
  * Explains seller’s agent duties
  * Signed at listing or as soon as practicable

==== Buyer Disclosure ====
  * Broker must disclose representation to buyer
  * Explains buyer’s agent duties
  * Signed prior to entering into an agreement

==== Dual Agency Disclosure ====
  * Must be disclosed to both buyer and seller
  * Requires informed written consent from both
  * Failure to disclose may void commission rights

===== Disclosure to Third Parties =====

  * Agents must disclose whom they represent
  * Required at first substantive contact
  * Applies to open houses and negotiations

===== Consequences of Failure to Disclose =====

  * Loss of commission
  * Disciplinary action by DRE
  * Civil liability
  * Possible rescission of contract