The In-House Deal and the Seller's Secret Deadline
A salesperson at a two-office Arkansas brokerage has a signed buyer agency agreement with Dana. Dana asks to see a house listed by the same brokerage but by a different salesperson. The listing salesperson knows the seller is relocating in 45 days and will accept $12,000 below list. The broker's policy says 'all in-house sales are handled as dual agency' and the broker asks both salespersons to 'share everything so the deal closes.' Dana has not signed any dual agency consent. The listing salesperson tells Dana the seller's deadline 'in confidence.' The buyer's salesperson is unsure whether to use the information in an offer.
1. May the brokerage act as a dual agent here? What must happen before any dual representation, and what should the buyer's salesperson do with the seller's deadline information?
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Dual agency requires informed consent. The brokerage has a listing on one side and a buyer agency agreement on the other. Dual agency creates a conflict because the brokerage owes loyalty and confidentiality to both parties. Arkansas requires informed written consent from both parties before a licensee acts as a dual agent. The broker's blanket policy is not consent. Dana has not consented, so the brokerage cannot simply 'share everything.'
Confidential information. The seller's 45-day deadline and willingness to take $12,000 less are the seller's confidences. If the buyer's salesperson uses them without the seller's permission, that is a breach of loyalty and confidentiality. Even with dual agency consent, a dual agent cannot use one party's confidential information to the detriment of the other; the usual practice is to keep the information confidential and not advocate one side's negotiating position.
Action. The buyer's salesperson should not use the deadline in Dana's offer and should escalate the conflict to the broker in writing.
2. If Dana refuses dual agency, how should the brokerage proceed, and what fiduciary duties survive?
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If Dana refuses dual agency, the brokerage should decline to represent both sides. It may refer Dana to another brokerage or continue with the seller side only after terminating or confirming the buyer agency relationship in writing. The brokerage must not let the listing salesperson represent the seller while another salesperson in the same firm advocates for the buyer without proper disclosure and consent.
Fiduciary duties survive the refusal: loyalty, confidentiality, disclosure, obedience to lawful instructions, reasonable care, and accounting. The buyer's salesperson must keep Dana's financial information confidential and must not disclose the seller's deadline to Dana. The broker should document the disclosure, Dana's choice, and the steps taken to avoid a conflict.