Same-Firm Buyer and the Seller's Secret Deadline
Priya, a salesperson at Coastal Shores Realty, has an exclusive buyer agency agreement with the Nguyens running through December 31. She shows them a listing held by Coastal Shores itself: list price $415,000. The Nguyens are preapproved to $400,000 and have $31,000 cash, planning a 5% down payment plus roughly $9,000 in closing costs. During the showing, the seller's agent - also at Coastal Shores - tells Priya in the driveway, 'My seller must be out in 40 days for a transfer and would take $392,000 for a fast close. Don't tell your buyers the deadline, and don't mention the foundation crack that's on the disclosure.' Back inside, the Nguyens ask Priya, 'What is the lowest they will take, and is anything wrong with this house?'
1. What is Priya's agency situation the moment she shows a Coastal Shores listing to her own buyer-client, and what must happen before any further negotiation?
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This is disclosed dual agency. Coastal Shores already represents the seller as listing agent; Priya's exclusive buyer agency agreement makes the same brokerage the buyer's agent too. Without written consent from both the seller and the Nguyens, the firm cannot represent both sides.
Steps, in order:
- Disclose in writing immediately - before showing further or discussing price - that the brokerage represents both parties and explain what changes (no advocacy for either side; confidences of one party are not shared with the other).
- Obtain written consent from both clients. If either refuses, the firm must withdraw from one side. The buyer can be released to another brokerage, or the seller can be handled by a different licensee in a designated agency arrangement if the firm's policy and written consents permit it.
- Document the choice in the file and confirm which licensee represents which party.
Trap to avoid: assuming buyer agency automatically trumps the listing side, or 'working it out' verbally. Undisclosed dual representation is a licensing violation regardless of how well the deal turns out.
2. The Nguyens ask about the seller's bottom line and about defects. What may Priya say, and what must she say?
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Two different duties pull in opposite directions, so separate them.
- Price and motivation are confidential. The 40-day deadline and the $392,000 floor are the seller's confidences. Even after dual-agency consent, a dual agent may not pass one client's confidences to the other. Priya may say: 'I can't share their motivation or negotiating position. Here is the market data; you decide what to offer.' She may relay an offer and its rationale, but not the seller's secret.
- Property condition is not confidential. A licensee must disclose adverse material facts actually known to them, and the foundation crack is squarely that. The seller's instruction to stay silent does not override the duty, and a seller's inaccurate property condition disclosure must be corrected. Priya should tell the Nguyens plainly what she knows, deliver/point to the written disclosure, and recommend a professional inspection and structural evaluation.
If the seller refuses to correct the disclosure, Priya should escalate internally and disclose independently - she cannot pass along a known lie. Keep a written record of both the disclosure and the seller's instruction.
3. Using the numbers given, can the Nguyens realistically offer $400,000, and what should Priya advise?
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Run the cash math first. 5% of $400,000 = $20,000 down, plus about $9,000 closing costs = $29,000 needed against $31,000 available - a cushion of only ~$2,000. That cushion will not survive an inspection, appraisal fee, prepaid taxes/insurance, and moving costs.
Options to present:
- Ask for seller-paid closing costs. Conventional financing caps seller concessions at 3% of price when the loan is above 90% LTV; 3% of $400,000 = $12,000, more than enough to cover the $9,000. Shifting that cost preserves the buyer's cash and effectively raises their buying power.
- Bid at or near $400,000 with clean terms. The seller's real constraint is speed, not price alone - a 40-day close and a strong preapproval letter may be worth more than squeezing the price.
- Keep a repair reserve. With $2,000 left, any foundation finding becomes a deal-killer, so the inspection contingency must stay in.
Advise an offer of about $395,000-$400,000 with seller-paid costs and a fast, verified closing date - not a bid that spends every dollar of the buyer's cash.