Same Brokerage, Two Clients, One House
Erin is a salesperson with a brokerage in Prince Albert. Her buyer client, Noah, is approved to $400,000 and has told Erin his absolute maximum is $385,000. Noah wants to offer on a house listed at $379,000 by the same brokerage; Mark is the listing salesperson for the seller. Noah does not realize Mark works in the same office. Erin’s broker says, ‘We’re one brokerage, so just get the deal done-we’ll take both sides.’ The seller told Mark privately that they would accept $370,000 but will not go below that. Noah asks Erin to keep his maximum secret. Erin is unsure whether she can advise Noah to offer $370,000 or tell Mark anything about Noah’s finances.
1. What agency issue arises when Noah wants to buy a property listed by the same brokerage?
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The brokerage, not the individual salesperson, is the agent. If the brokerage represents both the seller and Noah, this is dual agency, and it cannot be imposed simply because the two salespeople work in the same office. Saskatchewan’s agency rules require the brokerage to disclose the conflict and obtain informed written consent from both clients before acting for both. If consent is not obtained, the brokerage cannot represent both parties in the same transaction. Erin’s broker’s comment that ‘we’re one brokerage’ is actually the reason the issue exists: the brokerage’s knowledge and duties flow at the brokerage level. Erin should not treat Mark as a separate unrelated agent. The brokerage must explain the limits of dual agency, including that it cannot advocate exclusively for either side and cannot use one client’s confidential information for the other’s benefit.
2. How should Erin handle Noah’s maximum price and the seller’s bottom line?
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Erin must keep Noah’s maximum price confidential. She cannot tell Mark or the seller that Noah would go to $385,000. Mark likewise cannot tell Erin or Noah that the seller would accept $370,000 if that information was given in confidence. In a dual-agency situation, the brokerage must not use confidential information from one client to the disadvantage of the other. Erin also should not ‘steer’ Noah to offer $370,000 based on Mark’s confidential information. She can help Noah analyze market evidence and choose an offer price, but she cannot reveal the seller’s bottom line. If the brokerage cannot manage the conflict without using confidential information, it should not continue as dual agent. Noah should be told that he may want independent representation if he wants full advocacy and confidential advice.
3. What should the brokerage do if either Noah or the seller refuses dual agency?
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If either client refuses consent, the brokerage cannot act for both. The brokerage should stop acting as dual agent before confidential information is exchanged or used. One side must be referred to another brokerage, or one salesperson must withdraw from the transaction. The brokerage should document the disclosure, the refusal, and the steps taken to protect confidentiality. Erin should not continue to advise Noah while Mark continues to act for the seller unless a proper dual-agency consent is in place. If Noah moves to another brokerage, Erin must not pass on confidential information about him. If the seller moves, Mark must protect the seller’s information. The broker should also review the file to ensure no confidential information has already been shared.