Agency, Fiduciary Duties, and Brokerage Relationships
Disclosure comes first
Massachusetts requires a licensee to disclose whom the licensee represents at the first substantive contact, before the consumer reveals confidential information. Written agency agreements define the relationship. Buyer agency and seller agency are both common; a single licensee may represent both sides only as a disclosed dual agent with the informed written consent of both parties. Designated agency lets different licensees within one brokerage represent each side. Massachusetts rules also recognize a facilitator (non-agent) role, where the licensee assists both parties without representing either.
The fiduciary duties
Remember OLD CAR: obedience (to lawful instructions), loyalty, disclosure, confidentiality, accounting, and reasonable care and diligence. Two duties cause most exam trouble. Confidentiality survives termination of the relationship, but it never excuses hiding a known latent material defect: that must be disclosed to all parties. And a dual agent cannot advocate for one side over the other or reveal one party's motivation or bargaining position.
Traps
Watch for: 'Confidentiality lets the agent stay silent about a failed septic system' (false); 'Fiduciary duties end completely at termination' (false, confidentiality and accounting continue); 'Subagency is presumed' (false, an agent working with a buyer is presumed to represent the buyer absent disclosure); 'The agent paid by the seller owes loyalty to the seller even though the buyer is the client' (false, the source of compensation does not create the agency).
Worked example
A seller tells the listing agent, 'I would take $50,000 less because of a divorce.' The agent must not pass that to the buyer. If the same agent learns the septic system has failed, that material fact must be disclosed to the buyer.