We find dual agency still very common in Saskatchewan commercial real estate transactions. I am not going to address the pros and cons of dual agency in detail within this article. That is a topic unto itself.
Let me just say that due to the confidentiality requested by many of our sellers, I believe it will continue to be a practical business solution within our industry for many years to come. Complications arise when I, as a listing agent have an offer on my own listing and at the same time one of my colleagues and/or a cooperating broker has an offer.
The seller’s objective
The seller’s focus is very different from that of the buyer’s. Obviously the seller’s goal is to obtain the most money and favorable terms as possible. It is my fiduciary duty as a listing agent to see that goal fulfilled.
Typically multiple offer situations as described here will cause buyers to put their best possible offer on the table. The psychology of the negotiation is very different if there are no other competing offers.
The problem from the prospective purchaser’s point of view
How confident is the other agent’s client that I am not going to disclose the terms of their offer to my own client (thereby giving myself and client an opportunity to adjust our offer to make it the winning bid)?
Chances are their client does not know me and has a concern about being able to negotiate on a level playing field.
The problem from the listing agent’s point of view
I may or may not have a good working relationship with the other agent; they may or may not have trust in the offer process I am facilitating. It is probably important for them is to demonstrate to their client that they have protected their interests and provided a fair opportunity for their client to win the bidding process.
A reasonable solution
I have the opportunity to demonstrate professional integrity in these situations. We are paid well for what we do. I believe it is important and possible for all parties to walk away from multiple offer scenarios feeling like the negotiation was handled in a fair manner.
The moment I know that I have an offer on one of my own listings and another offer is coming in I will appoint another agent, preferably in another branch office (geographical separation provides for more confidential communication) to present all of the offers to my seller.
I will communicate to the other agents that I am competing with them, ask them not to disclose any details to me and direct them to the appointed agent to present their offer. This process is simple and it works. The prospective purchaser who offers the most attractive terms win!
Any good or bad multiple offer stories to share?
Posted by Barry Stuart
