In-House Listing and Buyer Representation
Dana is an affiliate broker at Ridgeline Realty. She has a signed exclusive buyer-representation agreement with Priya through December 31. Priya asks to see 412 Maple, a listing taken by Sam, another affiliate in the same brokerage. Before the showing, Sam tells Dana, “The seller is divorcing and will take $15,000 under list if we can close fast.” Dana wants to keep her buyer client and close the in-house deal. The brokerage’s written policy says it uses designated agency when possible and otherwise transaction brokerage with written consent. Priya has not signed anything about transaction brokerage. The listing is priced at $389,000; Priya’s written offer ceiling is $380,000. Dana has not given Priya the brokerage’s agency disclosure form for this in-house situation.
1. What agency relationship or relationships exist when Dana shows Sam’s listing, and what written disclosures or consents should occur before an offer?
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Dana already represents Priya under the signed exclusive buyer agreement, so Dana is Priya’s agent unless the relationship is changed in writing. Sam represents the seller. Because both affiliates work at Ridgeline, this is an in-house transaction, but it is not automatically dual agency.
The brokerage must follow its written policy and Tennessee agency-disclosure rules: give Priya the brokerage’s agency disclosure, identify who represents whom, and obtain written consent before using designated agency or transaction brokerage. If designated agency is used, Dana may represent Priya while Sam represents the seller, but the principal broker must supervise and protect each client’s confidences. If the brokerage cannot designate, it may act as a transaction broker only with informed written consent; a transaction broker assists the parties but does not advocate for either. Before consent, Dana must not treat the seller as her client or share seller confidences.
2. Can Dana tell Priya that the seller will accept $15,000 less? What should Dana do with Sam’s statement?
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No. Sam learned the seller’s willingness to discount while representing the seller, so it is confidential negotiating information. Dana cannot repeat it to Priya or use it to shape Priya’s offer, whether Dana is Priya’s agent or later a transaction broker. Using it would give Priya an improper advantage and breach the seller’s confidence.
Dana should not ask Sam for more seller confidences and should tell Sam to stop sharing them. She can advise Priya using tax records, comparable sales, inspection findings, and Priya’s own budget. If Sam’s statement affected the transaction, the principal broker should document it and address it internally.
3. If Priya insists on offering $380,000 and asks Dana to “push Sam for the seller’s bottom line,” how should Dana respond?
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Dana should explain that she cannot demand the seller’s “bottom line.” If designated agency is properly consented to, Dana negotiates for Priya by presenting the $380,000 offer, supporting it with market evidence, and conveying counteroffers; Sam advocates for the seller. Dana must not seek or use the seller’s confidential reserve.
If the brokerage instead becomes a transaction broker, Dana may transmit offers and factual information but cannot argue for either side or give advice that favors one party. Priya should decide the offer price. Dana should obtain the required written consent before any change and keep the buyer agreement and disclosures in the file.