Dual Agency and Confidential Price Information
Priya is the listing agent for 742 Alder Court, listed at $525,000. Her seller, Mr. Cho, privately tells her, 'I would accept $505,000, but do not tell any buyer.' Damon, an unrepresented buyer, tours the home and asks Priya to represent him. Priya's broker permits dual agency if both parties give written consent. Damon tells Priya, 'I can pay up to $510,000, but I want to start at $490,000.' Mr. Cho says he is willing to consent to dual agency. Priya has not yet shown Damon any other property and has not given him an agency disclosure. Damon asks Priya, 'What will Mr. Cho really take?'
1. Can Priya act as a dual agent here? What must happen before she does, and what are the limits?
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Priya may act as a dual agent only with the informed written consent of both Mr. Cho and Damon before she provides brokerage services to both. Virginia requires disclosure of the dual agency and its limits: the agent represents both parties, cannot advocate exclusively for either, must not disclose one party's confidential information, and must treat both fairly. Priya should give the agency disclosure to Damon, explain that she already represents the seller, and obtain signed consent. If either party declines, she cannot be a dual agent.
2. How should Priya answer Damon's question about Mr. Cho's bottom line, and why?
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Priya must not answer the question. The seller's $505,000 minimum and Damon's $510,000 maximum are confidential. She can say: 'I represent the seller and cannot discuss the seller's bottom line. You should decide your own price based on your own analysis.' She cannot use the seller's minimum to push Damon up or Damon's maximum to push the seller down. If dual consent is signed, the confidentiality duty continues; dual agency does not permit betraying either side.
3. If either party refuses dual agency, what options preserve the transaction and Priya's duties?
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If either refuses dual agency, the brokerage can use designated agency: the broker appoints one licensee to represent Mr. Cho and a different licensee to represent Damon, with written consent and confidentiality screens. If that is not feasible, Priya stays with Mr. Cho and Damon is referred to another brokerage or receives an unrepresented-buyer disclosure. Priya must not share Mr. Cho's confidential information with the new agent.