Same-Firm Buyer and Seller: Who Can Say What?
Broker Dana works at a firm with a designated broker. Dana has a signed buyer-broker agreement with Priya, who is preapproved for $460,000 and privately told Dana she will stretch to $500,000 because of an inheritance. Dana also has a listing in the same firm: 1420 Alder, listed at $475,000 for seller Greg. Priya wants to write an offer at $455,000. Dana's colleague is the listing agent. Greg asks Dana, 'Will your buyer go higher?' The designated broker has not appointed anyone in writing, and the firm uses Oregon's Initial Agency Disclosure Pamphlet.
1. What agency relationship would exist if Priya offers on the firm's own listing, and what must happen first?
Read the worked answer
This is a disclosed limited agency situation under Oregon law because one firm would be representing both the buyer and the seller in the same transaction. It cannot be secret or implied.
Before the firm acts as a disclosed limited agent, it needs:
- Written disclosure to both Priya and Greg of the limited agency and its consequences.
- Written consent from both parties.
- Written appointment by the designated broker of the licensees who will represent each side, so one licensee is not personally serving two masters.
If either party refuses consent, the firm cannot represent both sides in that transaction. It should refer one party to another firm or proceed with only one side represented, consistent with Oregon agency rules.
2. How should Dana answer Greg's question about whether Priya will go higher?
Read the worked answer
Dana should not answer with Priya's private ceiling. Priya's statement that she will stretch to $500,000 is confidential client information, and Dana's duty of confidentiality continues even in a disclosed limited agency.
A proper response is: 'I can't share my client's confidential instructions or financial position. Submit your best offer and the seller can respond in writing.' Dana also should not use the information to coach Greg to hold firm at $500,000. In a disclosed limited agency, the firm must not advocate one side's negotiating position over the other; it facilitates the transaction while protecting each client's confidences.
3. What should the firm do before Dana writes or presents Priya's offer?
Read the worked answer
The firm should pause and paper the agency relationship:
- Deliver the Oregon Initial Agency Disclosure Pamphlet if not already provided.
- Prepare a written disclosed-limited-agency disclosure and obtain written consent from Priya and Greg.
- Have the designated broker appoint, in writing, which licensee represents the buyer and which represents the seller.
- Confirm in the file that Dana will not disclose Priya's confidential financial information or negotiating ceiling to Greg or the listing agent.
If the written consent or appointments are not completed, Dana should not present the offer through the same firm as a dual-representation transaction.