The Seller's Divorce and the Buyer Who Called Directly
Ana is the listing licensee for a one-bedroom condo at 1420 Belmont St NW, listed at $525,000. Her brokerage, Meridian Realty, also represents buyer Marcus under a written buyer-broker agreement signed by a different Meridian licensee. Marcus has toured twice and told his own licensee he "would go to $515,000, not a dollar more." Marcus then calls Ana directly: "Why are they selling? Is the seller desperate? What's the real bottom line?" Ana knows the seller is divorcing and confided that she would take $495,000 for a fast, clean close. Meridian's written policy permits dual agency with consent; the seller signed a consent form at listing and Marcus signed one when he signed his buyer agreement. Both forms are on file, signed months ago.
1. What may Ana say to Marcus, and what must she withhold? Identify the specific information categories at stake.
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Two separate confidentiality duties are in play, and Ana cannot satisfy one by breaching the other.
Seller-side confidences: the divorce and the $495,000 walk-away number are the seller's confidential information. Ana may not reveal motivation or a bottom line without the seller's informed, specific permission. She may not hint at it either ("she's motivated" is a soft disclosure with the same effect).
Buyer-side confidences: Marcus's $515,000 ceiling is confidential as to the seller. Ana now possesses it and cannot let it influence how she presents his offer to the seller.
What she can say: factual, material information about the property and the transaction process - HOA documents, condition, disclosure status, how offers will be presented.
What she must do: remind Marcus in writing that Meridian represents both sides and that she cannot advocate for him or advise him on price, and redirect him to his own licensee at the firm. "Why are they selling?" can be answered only with what the seller has authorized in writing. Selling the property quickly is a legitimate goal; trading the seller's private motive for a faster deal is not.
2. Meridian wants to keep both sides. Are the two consent forms signed months ago enough, and what must the firm do now?
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Possibly not enough, and the firm should fix it before any offer is written.
DC permits dual agency, but the consent must be informed and tied to the actual conflict. A blanket form signed at listing or at buyer intake, months before anyone knew these two clients would collide on this property, is weak evidence that either party understood what they were giving up - namely, undivided loyalty and advocacy. A regulator or court will ask: did the seller know Marcus was Meridian's client and that Ana's colleague would be pushing the price down? Did Marcus know the licensee advising the seller's side has his ceiling number in the file?
Practical steps:
- Re-disclose in writing, now, to both parties: same firm, two licensees, no advocacy from either licensee, no disclosure of one side's confidences to the other.
- Consider designated agency - one licensee for the seller, a different one for the buyer - documented in writing, with the firm's confidentiality wall described.
- If either party declines, the firm must withdraw from representing one side (typically the buyer is referred out) before offer negotiation continues.
- Supervising broker confirms the file contains the current consent, not just the stale one.
Continuing under the old forms shifts risk from a paperwork problem into an undisclosed-conflict problem.
3. Marcus asks Ana to draft his offer herself, submit it straight to the seller, and "not loop in" his own licensee. How should Ana respond?
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Ana should decline the structure, and the reason is supervision as much as agency.
Marcus is a client of the firm, not an unrepresented customer. He has a licensee who owes him confidentiality, advice on price and terms, and advocacy - the very things Ana cannot give him as the seller's listing licensee. If Ana drafts and negotiates his offer, she is unofficially acting as his advocate while still advising the seller, which is the exact double role dual agency is supposed to prevent.
The concealment request fails on two grounds:
- Within a dual-agency firm, Ana cannot help one client keep material transaction information from the other licensee in the same firm whose job is to protect him; the managing broker must be able to supervise the file.
- She cannot agree to keep Marcus's ceiling from the seller-side decision-making in a way that suggests she is now working his side of the table.
Correct response: "I can receive your offer, but it needs to come through your licensee so you get advice I'm not permitted to give you. I'll confirm to the managing broker that you called me. I can't discuss the seller's motivation or price position." Then document the call. If Marcus insists on bypassing his own representative, the broker should reassess whether the dual representation can continue at all.