Thrilled and humbled to have been asked to share my views on Single Agency Representation for real estate clients for the San Luis Obispo County Bar Bulletin! Davies Company Real Estate has been committed to this client advocacy for over 40 years, and will happily never change.

1. A
Single vs. Dual Agency Representation
An Insider's View
of a Real EstateTransaction
retirement-aged couple
came to my office for
a first meeting, a recent
referral from a repeat
client. I asked: "What is most
important to you about this real
estatetransaction?"
They responded: "Wewant
an experienced and educated
advocate."
In my experience, this is what
every client truly wants. Akin to
those in the practice of law, I am
often in the position of meeting
a prospective client at a critical
decision-making point in life.
Real estate transactions nearly
always involve changes: changes
in finances, family size, marriages,
employment, location, tax needs,
and even court-mandated matters.
All clients need loyal advocacy.
SINGLE AND DUALAGENCY
There are two main types
of agency representation in real
estate transactions: single agency
and dual agency. In single
agency, the buyer and seller each
have their own separate real
estate licensee from separately
owned brokerages representing
their interests. Dual agency
occurs when the same brokerage
represents both the buyer and
seller. This can be with either
one agent or two different agents
within the same company.
(Although real estate
professionals are referred toas
brokers,REALTORS®, licensees,
andagents,for purposes of
thisarticleIwilluse'agent.')
For consumers and agents,
selecting single agency has
positive legal, financial, and
emotional impacts. My position is
that only single agency is consis­
tent with an agent's fiduciary
duty and avoids conflicts of
interest. In contrast, dual agency
may not be beneficial to buyers
or sellers and is in conflict with
fiduciary responsibility.
WHAT ARE THE IMPACTS OF
SINGLEAND DUALAGENCY?
In practice, there is no
effective way an agent can
represent both a buyer and
asellerinthesametransaction.
Itcompares to oneattorney
representing both a plaintiff
and a defendant in the same trial.
In client representation,
agents have a fiduciary duty
in each transaction. Per the
California Association of
REALTORS® required purchase
contract form on agency (CAR
Form AD), buyers and sellers are
advised that each party is owed
a "fiduciary duty of utmost care,
integrity, honesty, and loyalty...."
The form also includes Civil
Code Sections 2079.13-2079.24,
referencing agency.
A confident and well-repre­
sented single-agency client is less
likely to engage in legal action
by Dawna Davies
PhotocourtesyofClaraVanherweg
against their real estate agent
or other transaction parties. The
CAR Form AD states, "When you
enter into a discussion with a
real estate agent regarding a real
estate transaction, you should
from the outset understand what
type of agency relationship or
representation you wish to have
with the agent in the transaction."
Unfortunately,inpractice,
consumers usually find them­
selves in dual agency transactions.
They do not have an opportunity
to opt out of the agency arrange­
ment or enough information to
understand the difference.
FINANCIAL IMPLICATIONS
Financial implications of dual
agency are significant, and often
only benefit the real estate agent.
A common mistake that buyers
and sellers make is that they
assume that if they represent
themselves or have a dual agent,
they will get a 'better deal.' In dual
agency,the real estate agent makes
twice as much when the buyer
continued onpage 24
SLO County Bar Bulletin www.slobar.org January-February 2016 23

2. ----
has no other representation, and
it does not guarantee better terms
for either party.
The negative financial impact
to sellers has been researched
and documented. In a Wall S treet
Journal report from 2014 and in
an article from Redfin from 2012,
sellers who engage in dual agency
net 1.6-1.7percent less than their
list price at the closed sale.
Some buyers think they can
save money by working with
an agent who represents both
sides. They may not be aware
that in traditional real estate
transactions, the commission
is usually paid by the seller to
their agent, who splits their
commission with the buyer 's
agent, through the Multiple
Listing Service membership
agreement with co-brokers.
Therefore, no matter who repre-
sents them, usually the buyer
does not pay a commission.
EMOTIONAL IMPLICATIONS
There is emotional impact
with single agency and dual
agency. Single agency, from the
outset of a client relationship,
preserves the confidence of
a client. After explanation,
every prospective buyer or
seller I have explained this to
understands that dual agency
is a conflict of interest. Many
are surprised that this kind of
representation is allowed.
Clients have come to me
after having experienced serious
frustration with representation
in past dual-agency transactions
with other agents. With few
exceptions, they felt abandoned
by their agent and ultimately
had to advocate for themselves.
This has led to broken trust and
confidence.
Real estate agents often
avoid the discussion of agency
and, instead, influence clients
to choose them as an agent or
to accept their client's offer due to
filial or friendship loyalty, agent's
personal financial need for a
paycheck, or other emotional
reasons. Consumers are not
usually informed that when
parties have signed a real estate
contract for purchase, even
before it is accepted, the agency
relationships are confirmed and
cannot be changed.
Self-advocacy is exhausting
when one is not experienced with
real estate. Consumers cannot
personally keep up with the
industry changes, unless they buy
or sell about every two years. At
my count, there are 180 different
agreements in a typical real estate
purchase contract, with more
than 30 pages of fine print.
SINGLE AGENCY BACKGROUND
The term "single agency"
was advanced and taught in
classes by William Broadbent in
the 1970s. Mr. Broadbent was a
local San Luis Obispo broker and
national real estate instructor
who understood the need to
advocate loyally for clients.
He championed single agency
nationally until his death in 2015.
In his words, "The answer
to client representation is not
Seller Only brokerage firms or
Buyer Only brokerage firms,
but Single Agency real estate
practice."
Thankfully, my father Bill
Davies was a former student
of Broadbent and others who
championed this way of
representing clients. My father
practiced single agency, and
I follow in his footsteps.
DUAL AGENCY BACKGROUND
On the other hand, many
agents are motivated to
engage in dual agency. Dual
agency has been practiced
since the beginnings of real
estate brokerage. It is actively
practiced today. Single agency
is practiced by some agents, yet
those who consistently refuse
to engage in dual agency are
rare.
Locally, in 2015 in the City of
San Luis Obispo, 23 percent of all
property sales were dual-agency
transactions. Nationally, about
32 percent of transactions are
dual-agency. As mentioned, dual
agency is a financial windfall for
agents because they usually make
a much larger commission, often
twice as much because they have
no need to split the compensation
with a buyer 's agent. Some dual
agency agents say they have
24 January-February 2016 www.slobar.org SLOCountyBarBulletin

3. better control over the transaction
parties, less politics, and it is
more expedient.
INDUSTRY VIEWS
Unfortunately,the traditional
real estate industry establishment
does not acknowledge this as a
conflict of interest. Thegeneral
measure for success in the indus-
try is how many "transaction
sides" you engage in, indicating
that the more dual agency you
engage in, the more successful
you are.
The California Association of
REALTORS® (CAR) spentnearly
$1.5million in2015preserving
the right for agents to practice
dual agency (source: www.car.
org/governmentaffairs). Further,
there is a required form (Form
PRBS) intheCAR standard
forms for residential transactions,
with a section where the parties
automatically consent to dual
agency,requiring active editing
if a broker wishes to omit.
CLIENT ADVOCACY
Ipractice exclusive single
agency real estate, representing
only one side in each transaction.
I never represent both a seller
and a buyer at the same time for
the same property. My choice to
practice this way is because I
believe in advocacy for clients-
fiercely loyal, passionate
advocacy. This has never created
a lost sale or missed buyer in
40 years of business. If a buyer
comes to me and wants to
purchase a property that I have
listed, I refer them to another
agent. If a seller comes to me with
a property to sell that meets the
needs of my buyer, I refer them
to another agent or encourage
them to sell the property by
representing themselves. Other
agents understand that I do not
"steal" clients. This results in
moreprofessional transactions
with other agents.
Another reason Ipractice
single agency is that I have
benefitted personally as a buyer
and as a seller from this type of
representation. My investment
in real estate started at a young
age. My specific goals of funding
my own education and future
financial security were pursued
and accomplished because I had
a single-agency advocate during
my early investing process.
Initially this was my father, but
as I continued investing as an
adult in other areas of the United
States, I sought out brokers who
would represent me as single-
agency practitioners. As my
portfolio increased, the need for
strategy and advocacy increased
as well.
In my assessment, in order
to protect consumers, change
is needed in the practice of
conventional real estate represen-
tation. We are overdue for a
conversion toexclusive single-
agency representation. My hope
is that real estate agents would
practice like attorneys, without
a conflict of interest. Consumers
deserve loyal representation
without conflicts of interest.
Before they start looking at
property or considering listing
their home, knowledgeable
buyers and sellers should only
commit to work with brokers
who will practice exclusive single
agency.
Bypracticing singleagency
in real estate every day,I am
passionatelyproudofthework
I do for my clients. •
Dawna Davies is the Broker/Owner
ofDaviesCompanyRealEstatein
SanLuis Obispo, and isathird-
generationbroker.Thecompany,
founded nearly 50years ago,has
practiced exclusivesingleagencyfor
more than 40 years. Dawna has been
aco-instructorfor California Bureau
ofRealEstateaccredited classes,held
multiple leadership positions in
the San Luis Obispo Association of
REALTORS® and holds various
professional designations.Findmore
information at www.DaviesCo.com.
SLO County Bar Bulletin www.slobar.org January-February 2016 25
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