The Open House Confession: Seller's Agent, Dual Agent, or Facilitator?
Priya is the listing agent for 1420 Ash Street, listed at $415,000. At a Saturday open house she meets Marcus, who has no agent and volunteers that he is pre-approved to $450,000 and 'will pay over list for the right house.' Priya explains how offers are submitted, but she never gives him a written agency disclosure. That evening the seller tells Priya privately, 'We'd take $385,000 for a clean offer - we have to close by August 30 because of my job transfer.' Priya's brokerage also employs a buyer's agent, but on Monday Marcus calls Priya and insists that she write his offer herself. The seller is willing to sign a dual agency consent.
1. What is Priya's agency relationship with Marcus during the open house, and what should have happened before he began discussing offers and financing with her?
Read the worked answer
Priya is the seller's agent while she is marketing the listing, and Marcus is a customer, not a client.
- Minnesota requires a licensee to give the statutory agency disclosure and explain whom she represents at the first substantive contact - and in any event before the buyer signs anything. A conversation about financing, offer mechanics, and willingness to pay over list is substantive contact.
- The disclosure must make clear that Priya works for the seller, that anything Marcus says may be shared with the seller, and that she cannot advocate for him.
- What went wrong: by explaining offer procedures without disclosing her role, Priya let Marcus reasonably believe she was helping him. A disclosure produced at the offer-signing stage is too late to be meaningful and is itself a violation.
- Practical fix: provide the disclosure now, in writing, before any further discussion, and document the date and time it was given.
2. Marcus asks, 'How low will they go, and are they in a hurry?' What may Priya say, and what may she never do with the two pieces of information she now holds?
Read the worked answer
She may decline to answer. She may not disclose the $385,000 floor or the August 30 deadline.
- Price motivation and time pressure are not material facts about the property; they are the seller's confidential negotiating information. A seller's agent may not reveal them without the seller's authorization, and should not even confirm that a deadline exists.
- She may say something neutral and truthful, such as 'The seller will consider all offers' or 'Submit your best offer in writing.' She must not misrepresent material facts about the property itself.
- The mirror image: Marcus's $450,000 ceiling is now confidential as well. As the seller's agent she may press for the highest price, but she may not misstate the property, misstate competing offers, or fabricate a bidding war.
- If she later becomes a dual agent or facilitator, both confidences become locked: she could not use the $385,000 figure to steer Marcus, and could not use his $450,000 ceiling to steer the seller.
3. Marcus insists Priya write the offer, and the seller will consent. Walk through what the brokerage must do and how Priya's duties change - especially regarding the $385,000 and $450,000 figures.
Read the worked answer
Because the brokerage would represent both parties, this is dual agency and requires informed written consent from both.
- Get the written dual agency consent signed by Marcus and the seller before confidential information is exchanged or the offer is written. It must explain that both parties give up the right to undivided loyalty and to the full advocacy they would get from a single agent.
- Options if either side will not consent: (1) a different salesperson in the same brokerage represents Marcus - the broker still represents both, so consent is still required; (2) the brokerage acts as a facilitator for Marcus under a written facilitator agreement - no advocacy, but duties of disclosure, confidentiality, accounting, and care remain; (3) Marcus uses an outside brokerage.
- As a dual agent Priya may not use the seller's $385,000 floor to push Marcus up, may not tell the seller that Marcus will go to $450,000, and may not advise either side what to offer or accept. She may present options, explain the process, transmit documents, and must disclose material facts about the property to both.
- She should also document in the file what was disclosed, when, and who consented - the paperwork is the defense.