A real estate agent discovers that a competing offer on their listing comes from a buyer represented by an agent in their own brokerage. What disclosure and procedural requirements must be met?

Q: What is the correct answer to: A real estate agent discovers that a competing offer on their listing comes from a buyer represented by an agent in their own brokerage. What disclosure and procedural requirements must be met?

The correct answer is Full disclosure to the seller of the multiple representation and written consent before proceeding. Option B correctly identifies the mandatory requirements under Canadian real estate legislation. When multiple representation occurs (same brokerage representing both parties), provincial regulations require full written disclosure to all parties about the nature of the relationship and its potential implications. Written informed consent must be obtained before proceeding with the transaction. This ensures clients understand how their confidentiality, advocacy, and negotiation position may be affected. TRESA, RESA, and similar provincial acts specifically mandate these disclosure and consent requirements to protect consumer interests.

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

Multiple representation occurs when the same brokerage represents both buyer and seller in a transaction. This creates potential conflicts regarding confidentiality, advocacy, and negotiation strategies. Canadian provincial legislation (TRESA in Ontario, RESA in Alberta, etc.) requires specific procedures: full written disclosure explaining the nature of multiple representation and its implications, written informed consent from all parties before proceeding, and ongoing obligations to treat all parties fairly. The disclosure must explain how confidential information will be handled and how the brokerage's duty of advocacy may be limited when representing competing interests.

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

Remember DISC: Disclose the multiple representation situation, Inform all parties of implications, Secure written consent, Continue with fair treatment. Like a disc that has two sides, multiple representation serves two masters and requires transparency to work properly. When you see questions about same-brokerage scenarios, think DISC. If the question asks about requirements, look for answers that include both disclosure AND written consent. Avoid answers suggesting no requirements or broker-only notification.

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

Look for 'multiple representation' keywords when both agents are from the same brokerage. The correct answer will always include both 'disclosure' and 'written consent' - never just one or the other.

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

Sarah lists her home with ABC Realty. Two weeks later, another ABC Realty agent brings an offer from their buyer client. Before presenting the offer, both agents must provide written disclosure to their respective clients explaining that ABC Realty now represents both parties, how this affects confidentiality and advocacy, and obtain written consent to proceed. Without this disclosure and consent, the brokerage cannot legally continue representing both parties in the transaction.

Question

Agency & Professional EthicsDual Agency RulesHARD

A real estate agent discovers that a competing offer on their listing comes from a buyer represented by an agent in their own brokerage. What disclosure and procedural requirements must be met?

Answer Options

A

No special requirements as both agents work for the same brokerage

B

Full disclosure to the seller of the multiple representation and written consent before proceeding

C

The listing agent must withdraw to avoid any conflict

D

Only the broker needs to be informed of the situation