Two Confidences at One Open House
At a Summit Realty open house, licensee Priya represents the seller of a $520,000 house. Buyer Marcus walks in alone and, after twenty minutes, tells Priya: "We're pre-approved to $560,000 and honestly we'd pay full price to get into this school district." Priya knows from the listing file that the seller told her principal broker: "If someone offers $500,000 cash with a quick close, take it - I'm relocating in six weeks." Marcus then asks Priya to help him write an offer, to "tell us what the seller will really take," and finally asks whether Priya can "just be our agent too." Priya's broker says dual representation is fine and tells her to "keep both sides happy."
1. What is Marcus's status at the open house, and may Priya repeat either confidential statement?
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Marcus's status: he is a customer, not a client. Priya is the seller's agent and owes Marcus honesty, accuracy, and fair dealing - not advocacy, not loyalty, not confidentiality.
The seller's $500,000 floor: confidential. It belongs to Priya's client. Disclosing it would breach loyalty and would damage the seller's bargaining position. She must not hint at it, either ("I think they're motivated" is a hint).
Marcus's "we'd pay full price": this is the mirror image. Marcus said it to the seller's agent, before any representation of Marcus existed. Priya owes Marcus no confidentiality yet, and she owes the seller material information bearing on price. She may - and arguably should - relay it to the seller.
The trap: the moment a licensee starts protecting both parties' secrets, the licensee has stopped representing anyone. The duty of confidentiality attaches to clients, and it attaches in one direction at a time.
2. Marcus asks Priya to represent him too. What must happen before that is possible, and what changes if it does?
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Preconditions:
- Informed written consent from both the seller and Marcus, after each is told in plain terms what is lost (undivided loyalty, advocacy, and the free flow of confidential information).
- Brokerage policy that permits it, and a decision on whether a different licensee in the firm should handle Marcus instead.
- If consent is not obtained, Priya stays the seller's agent and Marcus either proceeds as an unrepresented customer or gets his own brokerage.
If consent is obtained: Priya becomes a neutral facilitator. She cannot negotiate harder for either side, cannot use one party's confidences against the other, and must put everything material in writing to both. In practice the $500,000 floor and the $560,000 ceiling become information she can neither use nor weaponize - she should push both parties to commit their positions in a written offer and counteroffer.
Practical point: many firms simply prohibit dual representation in-house. That policy choice is cleaner than trying to referee a $40,000 spread between two people who both think you are on their side.
3. Priya's broker says "keep both sides happy." How should she respond, and what does she document?
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"Keep both sides happy" is not a legal standard - and it is exactly the instruction that produces consent forms signed without understanding. Priya should respond in writing that she will not act for both without written informed consent, and that she will not soften disclosures to preserve goodwill.
Document, same day:
- Time-stamped notes of Marcus's statement about his ceiling and that it was made to the seller's agent.
- Written notice to the seller (or the broker, per office policy) of that information.
- A copy of the agency disclosure given to Marcus, with the date and time it was delivered.
- The broker's instruction and her written response.
Why: if a complaint is filed, the file - not memory - decides who was an agent, when, and who knew what. An agent who cannot produce the disclosure timeline is assumed to have disclosed late or not at all.