The Seller's Bottom Line and the Buyer Who Wants It All
Marta is the listing associate for Alan, who is divorcing and has told Marta in confidence that he would accept $285,000 even though the home is listed at $305,000. Chen, an unrepresented buyer, tours the home and asks Marta, "What is Alan's bottom line, and is he desperate to sell?" Chen then asks Marta to show him three other homes and "be my agent too, so I don't have to deal with two agents." Alan has already told Marta he will not consent to dual agency on his home. Marta wants to keep the buyer-side commission.
1. How should Marta answer Chen's questions about Alan's bottom line and motivation?
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Marta must first make sure Chen understands that she represents Alan, the seller. At first substantial contact she should give the required agency disclosure and explain that she cannot give buyer-side advice.
She may answer factual questions about the property, its condition, and the listed terms. She may not reveal that Alan would accept $285,000 or that the divorce is motivating him. Those are confidential facts learned within the agency relationship. A useful response is: "I represent the seller and can't discuss his private motivation or negotiating position. You should have your own representation if you want advice on price and strategy."
The judgment issue is that Marta's desire for the buyer-side commission does not override Alan's confidence. Even a hint such as "he's motivated" can breach loyalty and give Chen an unfair advantage.
2. Can Marta show Chen the three other homes and represent him?
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Not merely because she wants to. To act as Chen's agent, Marta must have a written buyer agency agreement and make the required agency disclosures. If she becomes Chen's agent on other properties, she must not use Alan's confidential information and must avoid conflicts.
The three other homes are not Alan's listing, so representing Chen on those homes is not automatically dual agency. But if Chen decides to buy Alan's home, Marta would be trying to represent both sides of the same transaction. Alan has refused dual agency on his home, so Marta cannot force it.
Safest judgment: Marta should offer to refer Chen to another associate or broker for buyer representation. If she does represent Chen on other homes, she must document the buyer agency relationship before showing and keep Alan's confidences separate.
3. Chen decides to make an offer on Alan's home. What are Marta's options and required disclosures?
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Marta cannot simply become Chen's advocate while remaining Alan's agent. Her options are:
- Remain Alan's agent only and tell Chen to obtain his own representation; Marta can present Chen's offer but cannot advise Chen.
- Refer Chen to another licensee and continue representing Alan.
- Dual agency only with written consent from both Alan and Chen. Alan has refused, so this option is unavailable unless he changes his mind in writing.
If Alan later consents, Marta must explain that a dual agent cannot advocate exclusively for either party, must disclose all material facts, must not reveal either party's confidences, and must not give one side an advantage. She also must disclose how compensation is being paid. Without that written consent, trying to keep both commissions is a conflict she cannot manage.