Here's an interesting one for you. Broker acting as principal through listing and selling his inherited is parents home. Associate Broker in same office, who is also the designated broker of record when the Broker/Owner is absent develops a client relationship with a young professional couple who love and live to restore older homes (circa 1940's). Following the customary screening and elimination process the clients settle upon two homes. One a 1940 Federalist style 2 story with 4 bedrooms 3 full baths, brick exterior, hardwood floors, dated kitchen, glassed in rear porch and two car garage. Situated on a small city lot in the historic district it would require significant refurbishing to the estimated tune of $125K. It was offered at $459K: Which was obviously too much for the condition of the home with its limited amenities and needs as related to refurbishing.
As you probably guessed the second home of choice was the inherited homestead of the Broker/Owner. It too was in the Federalist tradition and dated back to 1945. It had three bedrooms, 2 full baths and three half baths, a functioning indoor masonry pool, elevator, massive masonry fireplace, iron work balconies across the front of its all brick exterior. The inherited home looked over one of the original city parks dating back several hundred years. Additionally it was located on a city lot and a half. Structurally it was sound but like the first home it too needed a great deal of work with an estimated refurbishing cost of $100K. It was offered for $398,900.
Following a painstaking amount of time reviewing drawings, photographs and engineering reports (I forgot to mention that the couple were architect and drafts-person respectively and were members of the family architectural firm so resources to assist in evaluating, deconstructing and resurrecting a house were a non-issue) the selection was made. As you could have guessed it was the Broker acting as principal's property. So here we go choose dual agency or designated agency. Well, in part the decision was already made since the Associate Broker had previously secured Exclusive Buyers Brokerage with them prior to their selection of the actual property. Now that they had made the selection the Associate Broker had to review their and his position so they clearly understood what his now limited fiduciary responsibilities were. However they were completely satisfied and wished no change in their representation. Negotiations proceeded and concluded with the buyer purchasing the property for nearly $140,000 below the offering price. This resulted in them being able to put additional funds which had been previously relegated to acquisition towards restoration and modification. Although negotiations were tricky each party walked away satisfied with their respective objectives obtained. That is the Broker Principal disposed of property which he had inherited and the buyer received property at a price which would permit them to accomplish their goal of restoration and resale for a profit.
Because of the delicacy of dual agency I thought it might be of value to you folks in the AR comminity if I reviewed the events and then stated a few of the issues that had to be addressed in order to maintain my fiduciary responsibilities to the buyer while maintaining good ethical practices. The first and most important step was to review the Buyers Brokers contract with the buyers and to offer them the opportunity to withdraw and become customers. When they reiterated their desire to be represented as clients I added one significant covariate which was to advise them not to discuss the details of their offer, or financing with me prior to or during negotiations. I explained that this would not preclude me in providing them with all necessary statistical analysis and other pertinent information but would help me in my negotiations with the Broker Principal. After all negotiations is like playing poker. Which if you are a poker player you know how to read what are called Tells. Small signs that reveal something about what an opponent may be holding or is about to do. Therefore if I had no specific knowledge of their (the Buyers) limitations or expectations I could not either directly or indirectly weaken their position during negotiations through revealing information inadvertently through Tells which the Broker Principal may be aware of. I then had them sign and date a brief statement which documented their being informed of their agency relationship choices and that they understood and elected to continue in a Buyer Brokerage relationship. Secondly, once their desire for buyer's representation was confirmed I meet with the Broker Principal to ensure he clearly understood my position as my client's agent. At which time I apprised him of their decision and reiterated the fact that he needed to avoid any and all discussions as related to what his desires and intent were for a selling price. Once these two seemingly inconsequential but highly significant actions were concluded the purchase negotiations proceeded as in the case of any other acquisition. Although it was it difficult to accurately and adequately represent the Buyer in an obvious dual agency situation it was really not since I took a couple of additional steps to ensure everyone involved understood the ground rules. Rules which aren't written in some state Manual but rules of common sense. Perhaps this will assist some of you who may be struggling with this issue. 
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