Alabama Real Estate Broker Exam — All Questions

Under the Alabama Real Estate Consumer's Agency and Disclosure Act (RECAD), if a licensee has not entered a written agreement to represent a consumer as a single agent, the licensee is presumed to be acting as a:

• a.Single agent of the seller under the firm's listing agreement
• b.Transaction facilitator, not the consumer's agent✓
• c.Designated dual agent representing both sides of the deal
• d.Universal agent empowered to act for the buyer in all matters

Act 2025-380 (HB 382), effective October 1, 2025, makes this explicit. Under Section 34-27-82(b), at initial contact and until a broker enters a specific written agreement establishing an agency relationship, the licensee is considered a transaction facilitator and not an agent of that consumer, and in the absence of a signed brokerage agreement that facilitator relationship simply remains in effect. Note the vocabulary: the same Act renamed "transaction broker" to "transaction facilitator" and provides that the two terms carry the same meaning. The licensee cannot be the seller's single agent by virtue of the listing agreement either, because an agency relationship is never assumed, implied, or created without a written bilateral agency agreement signed by the licensee and the consumer. Dual agency now requires the informed written consent of all parties, once all parties have signed the consent agreement, so it cannot attach by default. And a universal agent, empowered to act for a principal in all matters, describes a far broader relationship than brokerage. The Act also removed "sub-agent" from the statute entirely, so subagency through the listing broker is no longer a category Alabama law recognizes.

RECAD requires an Alabama licensee to provide the written agency (brokerage services) disclosure to a consumer:

• a.Only when the consumer asks how the licensee and the company are compensated
• b.Before providing any brokerage service, such as showing a property✓
• c.Within 30 days after both parties have signed the purchase agreement
• d.At the closing table, when the consumer signs the settlement paperwork

Section 34-27-82(c) ties the disclosure to service, not to paperwork. The licensee provides the written disclosure form describing the types of brokerage services as soon as reasonably possible and before any confidential information is disclosed to any other person, and the statute then fixes a floor: such disclosure must occur at least prior to a licensee providing any brokerage service, which includes a licensee showing a property as to a prospective buyer but does not include a seller's agent conducting an open house. Entering into a brokerage agreement is not a trigger at all, and it points the wrong way in time — Section 34-27-82(e) provides that a consumer or customer may not be required to enter into a written brokerage agreement in order for a licensee to show a property, so the showing, and the disclosure, come first. The form is given to the consumer for signature, though the Commission's own form notes the consumer's signature is not required by law or rule. Making the duty depend on the consumer asking how the licensee and the company are compensated gets it backwards, because that compensation information is itself part of what the disclosure must carry, and the consumer who does not know to ask is exactly who it exists for. Thirty days after the purchase agreement is signed is worse, since by then the consumer has negotiated and committed without knowing whether anyone represented them. And the closing table is later still, long after confidences were shared and the bargain struck.

A qualifying broker in Alabama wants one associate to represent the seller and another associate in the same firm to represent the buyer in one transaction. This arrangement is:

• a.Permitted; the qualifying broker designates them in writing as single agents✓
• b.Legal only if the two associates work out of different branch offices of the firm
• c.Prohibited in Alabama, which bars one firm from working both sides of a deal
• d.Automatic dual agency for the whole firm, requiring both parties' written consent

Before October 1, 2025 this arrangement was automatic dual agency for the whole firm. Act 2025-380 (HB 382) reversed that. New Section 34-27-82(g) provides that when two or more licensees under the same qualifying broker are in separate agency agreements with a different party in the same transaction, the qualifying broker can designate those licensees as single agents as to each licensee's own client. The Commission's Real Estate Brokerage Services Disclosure adds that the designation must be in writing and made as soon as reasonably possible. The statute then says plainly that a designated single agent is not a dual agent, and that neither the qualifying broker, the designated single agent, nor any other licensee involved in the transaction is assumed to have knowledge to any other party with whom that licensee has not entered an agency agreement, so one side's confidences are not imputed across the firm. Dual agency in Alabama now means something narrower: Section 34-27-81(8) defines it as one licensee, an individual, representing both the seller and the buyer with the informed written consent of all parties, once all parties have signed the consent agreement. So the arrangement is neither automatic dual agency nor prohibited, and nothing turns on which branch office the associates work out of.

Under RECAD, which duty does an Alabama transaction facilitator still owe even though the licensee does not represent either party as an agent?

• a.The duty to exercise reasonable skill and care and to disclose known material defects✓
• b.The duty to negotiate the lowest price for the buyer
• c.Undivided loyalty to the buyer
• d.The duty to keep the seller's confidential financial information from the buyer at all costs

A transaction facilitator — the term Act 2025-380 substituted for "transaction broker," the two being synonymous under the statute — is not an agent, but RECAD still imposes real obligations: honesty in performing ministerial acts, reasonable skill and care, accounting for money and property, and disclosure of known material defects in the property. What falls away is advocacy. Undivided loyalty to the buyer is the hallmark of an agent serving one client, and a licensee who represents neither party owes it to neither. Negotiating the lowest possible price for the buyer is that same advocacy restated as a task, and it would require taking a side the facilitator has not taken. Guarding the seller's confidences at all costs likewise describes the posture of a seller's agent, and the absolute framing collides with the licensee's duty to disclose what is actually known about the property.

A listing broker in Alabama enters a property in the MLS and tells a cooperating licensee that she will be working the buyer's side as a sub-agent of the seller. Since October 1, 2025, that description is:

• a.Correct; sub-agency arises automatically through the listing service
• b.Correct, provided the seller consents to sub-agency in writing
• c.Wrong; the statute no longer recognizes sub-agency at all✓
• d.Wrong; sub-agency now requires the buyer's written consent instead

Act 2025-380 struck the definition of "SUB-AGENT" out of Section 34-27-81 and removed the word from Section 34-27-82(a), which now reads that "when engaged in any real estate transaction, the licensee may act as a single agent, dual agent, or as a transaction facilitator." That is the whole list. Because the category no longer exists, no amount of consent from either side can create it — which disposes of the two options that try to rescue it with a signature. Nor can a listing entry create it: Section 34-27-82(b) provides that an agency relationship "shall not be assumed, implied, or created without a written bilateral agency agreement signed by the licensee and the consumer," so an MLS offer of cooperation and compensation is not an agency appointment. A cooperating licensee with no written agency agreement is a transaction facilitator by default. The same Act also deleted "LIMITED CONSENSUAL DUAL AGENT" from the definitions and narrowed dual agency to one individual licensee acting for both sides with informed written consent, and it replaced the old pre-printed clause in Section 34-27-8(c) with a new representation disclosure clause in Section 34-27-82(i) that gives the listing licensee and the selling licensee three boxes each: agent, dual agent, or transaction facilitator.