Legally speaking: What is a listing agent able to share about potential buyers?
On September 15, 2014
By Lorie Garland, OAR Assistant Vice President of Legal Services
The OAR Legal Assistance Hotline receives an array of real estate-related legal questions — including license law issues, disclosure, contract law, ethics and commission problems, among others. In an effort to help you work within the law, our “Legally Speaking” series spotlights some of the timely questions that are being asked by REALTORS. This one involves seller consent to disclose…
Q: An agent with another brokerage showed my listing. The agent’s buyers are very interested in my listing, however, they have just started their home search and would like to view a few other properties to get a better feel for the market. The agent has requested I contact him if another buyer seems interested in the property and to definitely let him know if I receive an offer. I told him that I would, but I am now questioning my response. How should I have handled the agent’s request?
A: As the listing agent, your fiduciary duties are owed to the seller. Those duties include acting in the seller’s best interest, disclosing to the seller all material facts regarding the transaction and maintaining the seller’s confidential information, unless the seller authorizes disclosure of the information. Confidential information includes information the seller directs to be kept confidential or information that, if disclosed, could have an adverse effect on the seller’s position in the transaction.
Disclosing to a buyer’s agent that another buyer is interested in the property or has made an offer could be potentially detrimental to the seller. A buyer may decide not to make an offer when he learns he will be in competition with another buyer. As disclosing this information could be detrimental to the seller, it would be considered confidential information and should not be disclosed without the seller’s consent.
So, how do you handle an agent’s request to notify him of other buyers? There are two options. The first option is at the time the request is made by the buyer’s agent, you tell the agent that you will convey his request to the seller and will let him know the seller’s response. The other option is to address this issue upfront with the seller at the time you take the listing. If the seller consents to you providing this type of information, it is recommended that you get the authorization in writing. To assist members in this area, OAR developed a Seller’s Consent to Disclosure Form that lists this and other items that the seller permits his agents to disclose.
Tags: legal, Legally Speaking