Updated April 2026

Hawaii Real Estate Exam: Buyer vs. Seller Representation

Last updated: April 2026

Understanding the legal and ethical distinctions between buyer and seller representation is one of the most critical components of passing your state licensing exam. In the Aloha State, agency relationships are strictly governed by Hawaii Revised Statutes (HRS) Chapter 467 and Hawaii Administrative Rules (HAR) Title 16, Chapter 99. Failing to grasp who you represent—and the duties owed to that party—is a fast track to both failing the exam and facing disciplinary action from the Hawaii Real Estate Commission.

Whether you are just starting your studies or doing a final review, this guide will break down the nuances of agency law in Hawaii. For a broader overview of all exam topics, be sure to bookmark our Complete Hawaii Exam Guide.

The Foundation of Agency in Hawaii

In real estate, "agency" is the legal relationship created when one person (the principal/client) delegates to another (the agent/broker) the right to act on their behalf in a business transaction.

When you enter into an agency relationship in Hawaii, you owe your client strict fiduciary duties, universally remembered by the acronym OLD CAR:

  • Obedience: Following all lawful instructions of the client.
  • Loyalty: Placing the client’s interests above all others, including your own.
  • Disclosure: Informing the client of all material facts related to the transaction.
  • Confidentiality: Keeping the client's personal and financial information private (this duty survives the closing of the transaction).
  • Accounting: Accurately tracking and reporting all funds entrusted to you.
  • Reasonable Care & Diligence: Using your professional skills and expertise to protect the client.

Seller Representation (Listing Agency)

When a Hawaii real estate broker signs a listing agreement with a property owner, a seller agency relationship is formed. The broker (and by extension, all licensees associated with that broker) represents the seller.

Duties to the Seller

As a seller's agent, your primary goal is to secure the highest possible price and the most favorable terms for the seller. You must aggressively market the property, negotiate on the seller's behalf, and keep their motivations for selling strictly confidential.

Duties to the Buyer (Customer Status)

Even when you represent the seller, you still owe specific duties to the buyer, who is considered a "customer" rather than a "client." Under Hawaii law, you owe all customers:

  • Honesty and fair dealing.
  • Reasonable care and skill.
  • Disclosure of Material Facts: Hawaii is a strictly regulated disclosure state. You must disclose any fact, defect, or condition, past or present, that would be expected to measurably affect the value of the property to a reasonable person. This includes unpermitted structures, boundary encroachments (often determined by Hawaii metes and bounds legal descriptions), or issues with the property's title.

Buyer Representation (Buyer's Agency)

Historically, all agents represented the seller. Today, buyer representation is standard practice. A buyer's agency relationship is typically established through a written Buyer Representation Agreement.

Duties to the Buyer

As a buyer's agent, your loyalty flips: your goal is to secure the lowest possible price and best terms for the buyer. You must keep the buyer's financial situation and top-dollar willingness confidential from the seller.

Furthermore, a buyer's agent in Hawaii must exercise reasonable care in helping the buyer navigate local nuances. For example, if a buyer is purchasing oceanfront property, the agent should assist them in understanding shoreline setbacks and Hawaii water rights and riparian law, ensuring the buyer knows exactly what restrictions apply to their new land.

The Complexities of Dual Agency in Hawaii

Dual agency occurs when the same brokerage represents both the buyer and the seller in the same transaction. Because the fiduciary duties of loyalty and confidentiality inherently conflict in this scenario (the seller wants the highest price, the buyer wants the lowest), dual agency is heavily regulated.

Under HAR §16-99-3.1, dual agency is legal in Hawaii only if both parties provide informed, written consent. This consent must be obtained prior to the preparation of any contract between the parties.

Limitations in Dual Agency

When operating as a dual agent, your role shifts from an advocate to a neutral facilitator. You cannot disclose:

  • That the buyer is willing to pay more than the asking price.
  • That the seller is willing to accept less than the asking price.
  • The motivating factors for either party buying or selling.
  • That either party will agree to financing terms other than those offered in writing.

Estimated Frequency of Agency Relationships in Hawaii (%)

Practical Scenario: The Honolulu Open House

Exam questions often present situational scenarios to test your understanding of agency disclosure timing. Consider this example:

Kimo is a listing agent hosting an open house for his seller in Honolulu. Malia, an unrepresented buyer, walks in and falls in love with the home. Malia starts telling Kimo that she is pre-approved for $1.2 million, even though the house is listed at $1 million, and she desperately needs to move within 30 days because her current lease is expiring.

The Exam Question: What should Kimo have done?

The Answer: Kimo must disclose his agency relationship (that he represents the seller) before Malia shares any confidential information. Because Kimo represents the seller, he is legally obligated to tell the seller that Malia can pay up to $1.2 million and is desperate to move—putting Malia at a severe negotiating disadvantage. Proper agency disclosure protects the public from accidentally giving away their negotiating power.

Study Strategy for Agency Concepts

Agency questions make up a significant portion of the Hawaii state-specific exam. Because the rules require precise memorization of disclosure timelines and fiduciary duties, we highly recommend using Hawaii spaced repetition for exam prep. Reviewing these concepts at strategically spaced intervals will ensure the difference between a "client" and a "customer" becomes second nature on test day.

Frequently Asked Questions (FAQs)

Does Hawaii allow transaction brokerage or non-agency?

Unlike some mainland states, Hawaii does not officially recognize "transaction brokerage" as a distinct, standard status in the same way. In Hawaii, you are generally either an agent for the seller, an agent for the buyer, a dual agent, or you are dealing with an unrepresented customer. You must explicitly disclose your status.

When exactly must agency disclosure be made in Hawaii?

According to HAR Chapter 99, a licensee must disclose their agency relationship to an unrepresented party at least once orally prior to preparing a real estate contract, and in writing before any contract is signed. However, best practice dictates disclosing agency before any confidential information is shared.

Can a Hawaii licensee represent both the buyer and seller without them knowing?

Absolutely not. Undisclosed dual agency is illegal in Hawaii and is grounds for immediate license suspension or revocation, as well as potential civil lawsuits.

If a buyer is unrepresented, do I still have to present their offers to my seller?

Yes. As a listing agent, you have a fiduciary duty of disclosure to your seller, which includes presenting all written offers promptly, regardless of whether the buyer has their own representation.

How long must agency disclosure records be kept in Hawaii?

Hawaii real estate brokers are required to keep records of all real estate transactions, including agency disclosure forms and written consents for dual agency, for a minimum of three years following the consummation of the transaction.

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