An agent representing a seller receives two competing offers simultaneously. One offer is higher but comes from a buyer represented by the same brokerage. How should the agent handle this situation?

Q: What is the correct answer to: An agent representing a seller receives two competing offers simultaneously. One offer is higher but comes from a buyer represented by the same brokerage. How should the agent handle this situation?

The correct answer is Present both offers but explain the dual agency implications and obtain written consent before proceeding. Option D correctly identifies the complete process required under Canadian real estate law. The agent must present both offers to fulfill their fiduciary duty to the seller, but when dual agency is involved, provincial regulations require specific disclosure of the conflict and written informed consent before proceeding. This ensures the seller understands both the offers and the representation implications, allowing them to make a fully informed decision about both the transaction and the agency relationship.

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

Dual agency occurs when the same brokerage represents both buyer and seller in a transaction. Canadian provincial regulations (TRESA in Ontario, RESA in Alberta, etc.) require specific disclosure and written informed consent before dual agency can proceed. Agents have fiduciary duties to present all offers to their clients while managing conflicts of interest through proper disclosure. The regulatory framework prioritizes transparency and informed consent, ensuring clients understand both the transaction details and any representation conflicts. FINTRAC requirements may also apply for reporting purposes. Failure to properly handle dual agency situations can result in regulatory sanctions, civil liability, and loss of license.

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

Remember DISC: Disclose the conflict, Inform about implications, Secure written consent, Continue with presentation. Like a disc that must be complete to function properly, all four steps must be completed in dual agency situations - you can't skip any part of the process. When you see dual agency questions, mentally run through DISC to ensure all required steps are included in the answer choice. Look for options that include both disclosure and written consent requirements, not just one or the other.

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

In dual agency questions, look for answers that include both 'disclose' and 'written consent' - these are mandatory requirements. Eliminate options that skip disclosure steps or make decisions without proper client consent.

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

A listing agent receives two offers on Friday afternoon - one for $850,000 from an external buyer, and one for $875,000 from a buyer represented by a colleague in the same brokerage. The agent must present both offers to the seller, but before discussing the higher offer, must explain that accepting it would create dual agency, provide written disclosure of the implications, and obtain the seller's written consent to proceed with dual representation before the seller can make an informed decision.

Question

Agency & Professional EthicsCompeting Offers And Dual AgencyHARD

An agent representing a seller receives two competing offers simultaneously. One offer is higher but comes from a buyer represented by the same brokerage. How should the agent handle this situation?

Answer Options

A

Automatically recommend the higher offer regardless of the dual agency

B

Disclose both offers with full details and let the seller decide

C

Recommend the offer from the unrelated buyer to avoid dual agency complications

D

Present both offers but explain the dual agency implications and obtain written consent before proceeding