The Brokerage on Both Sides of the Table
Denise is broker of record for Cedar Point Realty. Her buyer-clients, the Harmons, signed an exclusive buyer agency agreement. They want to see 14 Millstone Lane, which Cedar Point also has listed, with agent Rob. The Harmons tell Denise, “We can go to $410,000, but don’t tell the seller’s side.” Rob asks Denise, “Are your buyers qualified, and what’s their ceiling?” The Harmons also ask Denise to write an offer that expires in 12 hours and to “word it so the seller has to fix the roof or pay $8,000.” Meanwhile, Denise’s unlicensed assistant has been answering calls about the listing and telling callers the seller “is motivated and will take less.”
1. What agency relationship arises when Denise shows the Harmons the Cedar Point listing, and what must the brokerage do before proceeding?
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Cedar Point already represents the seller under the listing agreement and separately represents the Harmons under a buyer agency agreement. When Denise shows and negotiates on the same listing, the brokerage becomes a dual agent; the conflict is at the firm level, not just between Denise and Rob.
Before proceeding, the brokerage must:
- Explain dual agency in writing and obtain informed written consent from both the seller and the buyers.
- Explain the limits: the firm cannot advocate exclusively for either side and cannot disclose one party’s confidential information to the other.
- If either side refuses consent, the firm should refer one side to another brokerage rather than proceed without consent.
Denise should also recognize that knowledge held by Rob is imputed to the firm, so “I didn’t know” is not a safe assumption.
2. How should Denise handle Rob’s question about the buyers’ ceiling and the Harmons’ requests about the 12-hour expiration and the repair-or-pay language?
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Rob’s question: Denise may not disclose the Harmons’ $410,000 ceiling. That is confidential buyer information. She may confirm only what the buyers authorize her to share, such as “they have a preapproval,” and even then she should avoid implying a maximum.
12-hour expiration: Denise may prepare an offer with a short expiration if the buyers instruct her to, but she should explain the practical consequence: the seller may not respond in time, and the buyers may lose leverage or need to resubmit. It is a business term, not legal advice.
Repair-or-pay clause: Denise should use the approved contract form and fill in factual terms. She should not invent legal language or advise the buyers on the legal effect. She should recommend attorney review, especially because Delaware closings and contract questions are commonly handled by attorneys. As a dual agent, she also cannot push the clause as if she were the buyers’ exclusive advocate.
3. What is the risk from the unlicensed assistant’s statements, and what should Denise do?
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The assistant is performing activities that require a license: discussing the seller’s motivation and negotiating posture with callers. That can be unauthorized brokerage activity and can create a misrepresentation if the statement is false or misleading. The brokerage may be responsible for statements made by staff acting within apparent authority.
Denise should:
- Immediately stop the assistant from discussing price, terms, motivation, or any confidential information.
- Limit the assistant to clerical tasks: scheduling, file maintenance, and relaying messages.
- Correct any misleading impression with callers where possible.
- Document the correction and provide supervision/training, because the broker is responsible for supervising unlicensed staff and advertising.