The Pocket Listing That Went Sideways
Priya is a licensed salesperson at Harbourline Realty in Halifax. A past client, Mr. Chen, wants to sell his Bedford townhouse but insists it be kept off the MLS and shown only to buyers Priya already knows, because he is embarrassed about a pending divorce. Priya agrees to a 90-day exclusive listing at 2.5% commission and begins quietly phoning four investor contacts. Before any written listing agreement is signed, she shows the unit to an investor, who offers $40,000 under asking. Mr. Chen hesitates. Meanwhile a buyer Priya met at an open house two weeks earlier calls asking about the townhouse; she emails him the address and a private showing time. The buyer's own agent later learns of this and complains to the brokerage. Mr. Chen then asks Priya to just 'handle the paperwork later.'
1. Identify the regulatory and agency problems in Priya's conduct before any listing agreement was signed, and explain what should have happened first.
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Two distinct issues arise before the paperwork question even matters.
First, the listing/commission arrangement. A brokerage may not trade in real estate or hold out that it will unless properly engaged; the written service agreement (with its commission and term) should be executed before marketing or showing activity begins. Priya's 90-day, 2.5% oral arrangement is unenforceable as written and creates a dispute risk over commission if Mr. Chen later lists elsewhere. The correct sequence is: signed listing agreement, then marketing.
Second, the agency problem with the open-house buyer. Priya met that buyer at an open house. Whether she became his agent depends on whether a written buyer-service agreement existed and what disclosures were made. If she had no buyer agency relationship, she still owes honesty and cannot act in a way that misleads the buyer into thinking she represents him. By privately emailing the address and arranging a showing directly, she risks being seen as working for the buyer while under contract (or near-contract) to the seller - a conflict she never disclosed.
The fix: get the listing signed, clarify in writing whom she represents, and route the interested buyer through a proper showing with disclosure of her role. 'Handle the paperwork later' is exactly the posture that generates complaints.
2. The offer is $40,000 below asking and Mr. Chen is undecided. What must Priya present, and to whom, and how does the private-marketing approach change her duties?
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Priya must present the offer to Mr. Chen promptly and in full, and she must do so in writing. Even in a private, off-MLS sale, the seller is entitled to see every written offer and to decide freely. She should not soften or filter the offer, and she should not tell the investor what the seller's bottom line is without authority.
Private marketing does not relax her duties; it sharpens them. Because the property is not on the MLS, the pool of buyers is small and controlled by her, which increases the risk that she steers buyers or fails to expose the seller to the market. She should document that Mr. Chen instructed limited marketing, confirm that instruction in the listing agreement, and advise him in writing that restricting exposure may affect price and time to sell. If he later claims he did not understand the trade-off, the file should show he was told.
She must also avoid disclosing the divorce as a motive for selling - that is the seller's private information and revealing it could weaken his negotiating position. Present the offer neutrally, note the gap from asking, and let the client decide.