In-House Showing Turns Into Multiple Representation
Ben and Chloe signed an exclusive buyer agency agreement (WB-36) with Maya, a licensee at North Shore Realty. They have been preapproved to $340,000 but told Maya in confidence they will not pay more than $315,000 and do not want that ceiling disclosed. They now ask to tour a condominium listed at $329,000 by Tom, Maya's colleague at North Shore Realty. The firm's policy permits designated agency. Ben and Chloe have not signed any multiple representation consent. The listing side has asked Tom whether the buyers are 'flexible on price.' Maya's broker wants the in-house showing to proceed because it keeps both sides in the firm.
1. What must North Shore Realty do before Maya shows the condominium, and what are the buyers' options if they refuse?
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North Shore Realty is proposing multiple representation: the same firm would represent both buyer-clients and the seller. Wisconsin law requires written disclosure and the written consent of all clients before the firm may act in multiple representation. Because the firm uses designated agency, it may assign Maya to Ben and Chloe and Tom to the seller, but the firm-level conflict and consent requirement remain.
Before the showing, Maya must give the buyers a written multiple representation/agency disclosure and obtain their written consent; she should also confirm the seller's written consent. If the buyers refuse, the firm cannot represent both sides. Options: (a) the firm withdraws from the buyer side and the buyers sign a termination of the WB-36, then may become customers of the firm-but only if no agency is undertaken; (b) the firm refers the buyers to another brokerage; or (c) the firm withdraws from the listing side with the seller's agreement. Maya should not show the listing as a dual agent without consent.
2. May Maya share Ben and Chloe's $315,000 ceiling with Tom or the seller? Explain.
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Confidential information includes the clients' motivation, financial position, and maximum price. Maya may not disclose the $315,000 ceiling to Tom, the seller, or anyone on the listing side, even within the same firm. Designated agents are screened from each other's client confidences; the broker should implement an office policy that prevents Tom from accessing Maya's buyer file.
Maya may use the ceiling to advise the buyers-for example, that $329,000 is above their stated limit-but she cannot use it to help the seller negotiate. If the buyers authorize disclosure in writing, that is different; absent authorization, disclosure would breach loyalty and confidentiality and could support discipline and civil liability.
3. How should Tom respond when the seller asks whether the buyers are flexible, and what can Tom properly seek?
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Tom should not ask for or pass along the buyers' confidential ceiling. He can ask for objective, non-confidential information relevant to any offer: a preapproval letter, proof of funds, financing type, down payment, closing date, and any contingencies. He should tell the seller that buyer motivation and maximum price are confidential and that the seller should evaluate written offers on their terms.
If the seller asks Tom to screen buyers based on protected characteristics or voucher use, Tom must refuse and document the instruction. Tom may say, 'I can't disclose their private financial ceiling, but I can ask their agent for a preapproval and proof of funds.'