2.1 Arizona Agency Relationships

Where This Fits on the 2026 Exam

Effective January 1, 2026, Pearson VUE splits the Arizona salesperson exam into two parts: the General exam (ReAZ-Sales-GE) with 80 scored questions and the State exam (ReAZ-Sales-S) with 100 scored questions. You face 180 scored questions plus unscored pretest items, with 5 hours total seat time and a 75% passing score on each part. Arizona agency and disclosure law lives on the State portion, so the rules in this chapter are exam-critical, not background reading.

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Types of Agency Relationships Arizona Recognizes

How Agency Is Created in Arizona

The single most-tested trap: agency is created by a written employment agreement, never by conduct, courtesy, or compensation. Showing a buyer five houses, answering questions, or even receiving part of the commission does not make you that person's agent. Until a buyer signs a buyer-broker agreement, the buyer is a customer, not a client.

• Listing agreement creates seller agency.
• Buyer-broker employment agreement creates buyer agency.
• Property management agreement creates landlord agency.

Worked scenario: A salesperson spends a Saturday touring homes with an unrepresented buyer who never signed anything. The buyer is a customer; the salesperson owes honesty and material-defect disclosure but no loyalty or confidentiality. If that buyer's secrets ("I'd pay full price") are repeated to the seller, no fiduciary duty was breached because none existed.

The Broker Is the Agent

In Arizona the designated broker holds the agency relationship with the client. Salespersons and associate brokers act for and under the supervision of that broker. Practically:

• The employment agreement runs between the client and the brokerage, not the individual salesperson.
• A salesperson who changes firms cannot take the listing; it belongs to the broker.
• The broker is responsible for the acts of every licensee in the firm.

The Six Fiduciary Duties — OLDCAR

Clients (not customers) are owed these duties. Expect questions that hand you a fact pattern and ask which duty was breached.

Trap: Loyalty and confidentiality survive the transaction. You cannot reveal a former client's confidential financial information years later. Obedience, however, never extends to unlawful instructions—if a seller says "don't show it to that family," you must refuse, because fair housing law overrides client instructions.

Duties to Customers (Non-Clients)

Even with no agency, Arizona licensees still owe every party in a transaction:

• Honesty and fair dealing — no false statements, no fraud.
• Disclosure of known material defects — you must reveal property problems you actually know about.
• Truthful answers — you may not actively mislead a customer who asks a direct question.

What you do not owe a customer: loyalty, confidentiality, obedience, or advice on negotiation strategy. Arizona does not formally use the "transaction broker" label, but the practical effect is similar—when working with an unrepresented party you provide factual information only and do not advocate for them.

Compensation Does Not Determine Agency

A recurring exam favorite: who pays does not control who is represented.

When and How to Disclose Agency

Disclose the agency relationship before any confidential information is exchanged—at the start of the relationship and before showing property or writing an offer. Disclosure may begin orally but should be confirmed in writing and documented in the transaction file. Naming who you represent up front prevents the most common consumer complaint to ADRE: a customer who believed the agent was "on their side."

Subagency in Arizona

Under a cooperating arrangement, a salesperson at a different firm who brings the buyer may technically act as a subagent of the seller if buyer agency was never established. Subagency means that second agent owes the seller fiduciary duties and the buyer only customer-level duties. Because this surprises buyers, the modern Arizona practice is to establish buyer agency in writing so the buyer is genuinely represented. On the exam, remember that subagency, agency, and customer status are three different things, and a written agreement is what moves a party from customer to client.