A listing agent discovers that a competing offer came from a buyer who is the business partner of another agent in their brokerage. The listing agent was not previously aware of this relationship. What should they do?

Q: What is the correct answer to: A listing agent discovers that a competing offer came from a buyer who is the business partner of another agent in their brokerage. The listing agent was not previously aware of this relationship. What should they do?

The correct answer is Present the offer but disclose the relationship to their seller client. Option B correctly balances two fundamental fiduciary duties: presenting all offers and providing full disclosure. Under TRESA and provincial regulations, agents must present every offer received while disclosing material facts that could affect their client's interests. The business relationship between the buyer and a brokerage colleague is material information that could influence the seller's evaluation of the offer's credibility, negotiation strategy, or potential complications. This disclosure allows the seller to make an informed decision while ensuring the agent fulfills their duty to present all offers.

Q: What background knowledge is needed for this Agency & Professional Ethics question?

Canadian real estate agents owe fiduciary duties to their clients including loyalty, disclosure, confidentiality, and acting in the client's best interests. Under TRESA (Ontario), RESA (Alberta), and similar provincial legislation, agents must present all offers received and disclose any conflicts of interest or material facts that could affect the transaction. Material facts include relationships between parties that could influence the offer's terms, negotiation process, or completion. Agents cannot withhold information that could impact their client's decision-making, even if they weren't involved in creating the situation. The duty of disclosure extends to relationships within the same brokerage that could create potential conflicts.

Q: What is a good way to remember the answer to this Agency & Professional Ethics question?

PRESENT: Present all offers, Reveal relationships, Explain conflicts, Share material facts, Ensure transparency, Never withhold, Tell the truth. Like presenting a gift, you must show what's inside (the offer) and explain any strings attached (relationships/conflicts). When facing offer presentation questions, remember PRESENT. Ask yourself: Am I presenting the offer? Am I revealing all relevant relationships? This helps ensure you choose options that balance presentation duties with disclosure obligations.

Q: What exam tip applies to this Agency & Professional Ethics question?

Look for keywords like 'disclose,' 'present,' and 'relationship.' When agents discover conflicts or relationships after receiving offers, they must both present the offer AND disclose the relationship. Never choose options that involve hiding information from clients.

Q: How does this Agency & Professional Ethics concept apply in real world practice?

A listing agent receives three offers on a property. While reviewing them, they notice one buyer's name matches their colleague's business partner from a property development company. Even though the agent had no involvement in this relationship and learned about it only when reviewing offers, they must present all three offers to their seller client while specifically disclosing that one buyer has a business relationship with someone in their brokerage. This allows the seller to evaluate whether this relationship might affect the transaction's reliability or create any concerns about confidentiality or preferential treatment.

Question

Agency & Professional EthicsConflicts Of InterestHARD

A listing agent discovers that a competing offer came from a buyer who is the business partner of another agent in their brokerage. The listing agent was not previously aware of this relationship. What should they do?

Answer Options

A

Reject the offer immediately due to conflict of interest

B

Present the offer but disclose the relationship to their seller client

C

Accept the offer only if it's the highest received

D

Present the offer without disclosure since they weren't involved in creating the relationship