Can a broker legally/ethically represent two bidders for the same property?
This one came from Urban Baby and it’s a great question. Legally, there shouldn’t be a problem, at least in New York and New Jersey. The broker is an agent of the seller, and bringing in two bidders and having them war against each other –that’s exactly what a broker is supposed to do.*
Ethically, though, it’s a thornier consideration. Whenever I am working with buyers and I bring someone in to see a property that I have shown before, I always say, “I just showed this to Client X.”
In the unlikely situation that both clients wanted to bid (I have never actually had this happen) I would hand one of them to someone else in my firm, setting up a Chinese wall so that each of them felt their confidentially about their bids and finances wasn’t being violated. I think that’s the only ethical way to do it.
*Update: the December 2007 issue of Realtor magazine mentions a Montana case {Zuazua vs. Tibbles, I am not making this up) where an agent represented two bidders, and the bidder who lost out sued and won.
As the article puts it: “The Montana Supreme Court decided that although the state’s license law didn’t specifically forbid representing two buyers, it did state that a buyer’s representative must ‘act solely in the interests of the buyer.’ That meant that an agent could represent only one buyer at a time in the same transaction, said the court.”