My Partner and I subscribe to a lot of legal newsletters and reviews concerning the real estate industry, and some of the court cases that it covers are absolutely amazing. For example, take the case of Amador Zuazua v. Tom and Carol Tibbles, decided by the Montana Supreme Court in February 2007.
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Seems that a buyer's agent put in a purchase offer
on the same property
for two different buyers
at the same time!
Huh?
The Montana Supreme Court ruled that state statutes disallowed a buyer's agent from representing two buyers buying the same property at the same time. Well, duh! Apparently Montana laws require that a buyer's agent "act solely in the best interests of the buyer." Well duh! yet again. How can you do that for two different buyers on the same property at the same time?
Out here I can represent both the seller and the buyer on the same property, which I think is a severe conflict of interest, notwithstanding the fact that it can be very lucrative financially, but to represent two different buyers on the same property at the same time?
How creative!! One could get a better commission by pitting the two buyers against each other to drive up the purchase price. I repeat, How Creative!!
What's even more amazing to me is that the Montana Association of Realtors, Inc., filed a brief in support of the buyer's agent. Huh?????
If I had been the buyer's agent, I would have presented the first offer and, if it had fallen through, then presented the second offer, but not simultaneously.
Fortunately, the Montana Supreme Court correctly determined that one cannot "act solely in the best interests of the buyer" when there are two buyers.
What part of "solely" and the singular "buyer" did the buyer's agent, and the Montana Association of Realtors, not understand?
5 Comments on Representing two buyers on the same property simultaneously
OCT
06
2008
That is a problem. Ethically you have a duty to your buyer to act in their best interest. Best thing to do would be to hand off a buyer to another agent for representation, even one on your team. -Charles
Back when the Northern Virginia real estate market was crazy I had a listing where 6 unrepresented buyers wanted me to write offers for them. I decided to farm them all out to agents in my office. It was a mad house as they all ran to meet with the agents I rounded up and every conference room was full. My broker called me and said what the ^%$ is going on. When I explained the situation he got it and said Kudos for thinking on your feet. I can't imagine why someone thinks they could fairly and ethically represent more than one buyer on a property. Geezzzz!
The agent who receives information about the two different offering buyer clients on the same property ... should give both prospective offers and buyer clients to the managing broker. The managing broker of record would make the decision which one of the offering parties that he or she could represent. Some choice must be made by the managing broker. Then the broker would so notify the prospective buyer who is not chosen by the broker and that the broker could not represent that buyer who is not chosen. That broker could not in that situation represent two buyer offers on the same property. Harrison
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That is a problem. Ethically you have a duty to your buyer to act in their best interest. Best thing to do would be to hand off a buyer to another agent for representation, even one on your team. -Charles