California specifics
Agency disclosure sequencer
Disclose, elect, confirm. Three statutory steps and five delivery points, each with its own timing. The exam tests them individually, so learning them as one ordered sequence is far more efficient than memorising them separately.
- 01
Listing agent to seller
Deliver the statutory agency disclosure form
Before entering into the listing agreement
The seller must understand what the relationships can be before choosing one. Delivering it afterwards defeats the purpose entirely.
- 02
Listing agent and seller
Elect the agency being provided
At the listing agreement
The election is a choice, and it records who the agent represents. It is the second of the three statutory steps.
- 03
Selling agent to buyer
Deliver the statutory agency disclosure form
As soon as practicable before the buyer executes the offer
The buyer must know who the agent represents before committing to anything, which is why the timing is tied to signing rather than to acceptance.
- 04
Selling agent and buyer
Elect the agency being provided
Before or at the buyer representation agreement
If the same brokerage holds the listing, this is the point at which dual agency becomes visible and informed written consent must be obtained from both sides.
- 05
Selling agent to seller
Deliver the disclosure form to the seller
Before presenting the offer, or as soon as practicable after
The seller is entitled to know who the person bringing the offer represents before they evaluate it.
- 06
Both agents
Confirm the agency election in writing
In the purchase agreement, or a separate writing executed with it
Confirmation is the third statutory step and it locks the election into the transaction document. The MLS has no role here.
Two salespersons, one brokerage, still dual agency
Agency attaches to the broker, and a salesperson acts on the broker's licence. When one brokerage holds both sides of a transaction the broker is a dual agent and both parties must consent in writing, even though two different people are involved. This is lawful and common, and it must be disclosed as dual agency.
How this is calculated
The order is not arbitrary. Disclosure must come before election because a party cannot choose a relationship they have not had explained. Confirmation must come after election because it records the choice that was made. Reversing any two steps is the most common wrong answer in this topic.
The point where this most often goes wrong in practice is dual agency. Agency attaches at the broker level and a salesperson acts on the broker's licence, so when two different salespersons in the same brokerage represent the buyer and the seller, the broker is a dual agent. Both parties must give informed written consent, even though no individual person is on both sides.
What a dual agent loses is advocacy on price and terms: they may not tell the buyer the seller will take less or tell the seller the buyer will pay more, without written permission. What they keep is the duty to disclose material facts about the property to both sides.
The full area, including duties to non-clients and the difference between being represented and being owed something, is in Laws of Agency and Fiduciary Duties, which is 17% of the examination.