Dual Agency: A Confidential Floor, a Cash Claim, and a Love Letter
Your brokerage practices dual agency with written consent. You represent both the Hendersons (sellers) and the Nguyens (buyers) on a $615,000 sale. In a private call, Mr. Henderson says, "Between us - my wife lost her job, we'd take $585,000 for a 30-day close, but don't tell the buyers." The Nguyens are pre-approved to $660,000, which you know because you are also their agent. Ms. Nguyen asks you directly, "What's their bottom line? We can close fast." Mr. Nguyen asks you to "tell them we're paying cash" - they are not - and to write a personal letter about their newborn. The Hendersons then ask, "While we're waiting, can we see what else is out there?"
1. Sort what may and may not be shared under dual agency with written consent.
Read the worked answer
Walled off - do not disclose to either side:
- The Hendersons' $585,000 floor, 30-day preference, and the job loss. Motivation and confidential financial circumstances are exactly the category of information a client expects an agent to protect.
- The Nguyens' $660,000 pre-approval ceiling. Telling the seller "they can go higher" is a straightforward breach that would cost the buyers real money.
Shareable - with authorization or as ordinary transactional fact:
- That a written offer exists, its price, terms, contingencies, and the buyers' financing type as stated in the offer and lender letter.
- Anything a client specifically authorizes you to convey.
The dual-agency problem in one sentence: you owe confidentiality to both sides simultaneously, which means the information that would make you most effective for one client is precisely the information you cannot use for the other.
Practical duty: confirm the written consent is current, document both conversations, and if the parties' positions begin to collide such that you cannot be fair to both, disclose that and step back - designated agency, another agent in the firm, or withdrawal from one side. Rules on dual agency and on disclosing competing offer terms vary by state; verify the specific requirements before acting.
2. Give your scripts for the bottom-line question, the cash misrepresentation, and the love letter.
Read the worked answer
"What's their bottom line?" "I can't share their confidential position - I couldn't share yours with them either. What I can do is make your offer as strong as it can honestly be: price, earnest money, close date, financing certainty. Tell me your best number and your best close date and I'll present both in writing." Then earn your fee by advising them on where their own money is best spent, not by trading someone else's secret.
"Tell them we're paying cash." Refuse flatly and explain: "I can't state a financing type that isn't true. That's a misrepresentation on a contract, it can void the deal, and it puts my license and your deposit at risk. Here's what I can say: conventional, 5% down, pre-approved, lender letter attached, 21-day close with a $10,000 appraisal gap commitment." Note the practical payoff - certainty is what the seller actually wants, and it can be packaged honestly.
The love letter. Explain the fair-housing exposure: personal letters routinely reveal protected-class information (family status, religion, national origin), and in dual agency you would be the one transmitting it - to your own seller client. Recommend a neutral cover letter limited to financial terms, or none at all. If they insist, document the advice in writing.
3. The Hendersons ask, "Can we see what else is out there?" while the Nguyens' offer is pending. What do you advise, and what are the limits?
Read the worked answer
Separate three things that sound alike.
Soliciting backup offers. Generally permissible while a contract is pending, and often sensible: a backup protects against the buyer's financing failing. Say yes to this, with the caveat that any backup offer must be written to take effect only if the first deal falls apart.
Shopping the Nguyen offer. Using the buyers' specific price and terms to invite higher bids crosses the line in a dual-agency setting. You would be leveraging one client's confidential offer to improve the other client's outcome. Refuse it: "I can market the home and take backup offers, but I can't use their offer terms as bait."
The "see what else is out there" instinct itself. This is a seller who has not yet decided the pending offer is good enough. Name it honestly and put it on a timeline: "If you want to test the market, tell me now and we respond to the Nguyens with a counter rather than an acceptance - that is a legitimate move. Waiting silently while holding their offer is not a strategy, it is a way to lose a buyer who is ready today."
Document the conversation either way, and remember that disclosure obligations about competing offers run to buyers in many states - check the local rule before the next showing.