Can a Real Estate Agent Represent Two Buyers on the Same Property?

Check with your state regulators or MLS counsel

However, regulations or common law may vary depending on which state you’re in. So make sure to check with your local licensing regulator or legal counsel at the local MLS to see what courts have ruled in similar situations.

For example, in New York, the former legal counsel at a major real estate association opined:

We do see how this could be a conflict of interest or uncomfortable situation for all parties involved.  The agent may want to disclose to both buyers and pair one of the buyers up with another agent in the firm to represent them, so that they are not negotiating both of their clients offers against each other.

Its important I add that there is a decision in the New York courts from a similar matter at another firm.  The court said that an agent cannot represent 2 buyers for the same property and they must recuse themselves from working with at least one of the buyers.  Therefore, my recommendation below is more of an instruction by the courts to pass one of the buyers onto another agent.  It is ok if that agent is associated with the same brokerage.

When a listing agent (i.e. seller’s agent) is in the position of having multiple direct buyers interested in their listing, the first temptation is to try to get the buyers to agree to dual agency. However, it’s often simpler for the agent to just remain a seller’s agent vs a dual agent when it comes to direct buyers.

Remember that a dual agency relationship, if formed, makes communication extremely difficult between the seller client and the buyer client. The agent would have to be extremely careful about what they say in order to not accidentally harm the interests of either client.

This route doesn’t necessitate a lengthy explanation about what dual agency is, or its risks. In fact, it doesn’t require any permission at all as the agent makes clear the he or she is remaining a seller’s agent, and thus represents only the seller’s interests.

Furthermore, in many states an agency disclosure form is not necessary to even be presented to the buyers unless a substantive contact has been made.

For example, in New York “substantive contact” is defined as contact:

• In which a discussion or dialogue between the consumer and the associated licensee moves from casual introductory talk a meaningful conversation.

• Regarding the selling or buying motives or objectives of the seller or buyer, financial qualifications, and other confidential information that if disclosed could harm the consumer’s bargaining position.

Note: In some states like Florida, being a dual agent is simply not allowed. Per 475.278 of The 2021 Florida Statutes, “a real estate licensee may not operate as a disclosed or nondisclosed dual agent.” However, in Florida there is a presumption that an agent is operating as a transaction broker unless a single agent relationship is agreed upon. This limited form of representation is the default agency status in practice in most transactions.

It’s best practice for buyer’s agents to inform their buyer clients of a potential conflict of interest as soon as they are aware of another client being interested in the same listing.

Even if your state doesn’t prohibit you from representing both buyers on the same property, it’s still best practice to be as transparent as possible about any potential or perceived conflicts of interest.

Sample email from a New York agent

Dear George,

It has come to my attention that another buyer client of mine has expressed interest in 222 Madison Avenue, Apt 4D, New York, NY 10023 which we saw together last week. Are you interested in proceeding further, or placing an offer on this property?

If you are no longer interested, then there is nothing to do and this is a non-issue. However, if it turns out that you both are interested in proceeding further than a showing, I will need to assign one of you to another agent on my team to prevent any potential conflicts of interest.

Thank you, and please let me know when you have a moment!

Best,
Sam

Sample email from a Florida agent

Dear George,

It has come to my attention that another buyer client of mine has expressed interest in 6790 Collins Avenue, Apt 2105, Miami Beach, FL 33141 which we saw together last week. Are you interested in proceeding further, or placing an offer on this property?

If you are no longer interested, then please ignore this email. However, if it turns out that you both are interested in proceeding further than a showing, I can either assign you to another agent on my team for that specific property’s negotiations, or I can continue working with both of you.

I would like to remind you that by default, we have a Transaction Broker Relationship per 475.278 of the Florida Statues. Even though this is a limited form of representation where I don’t represent either the buyer or the seller in a fiduciary capacity, I still have the following duties:

(a) Dealing honestly and fairly;
(b) Accounting for all funds;
(c) Using skill, care, and diligence in the transaction;
(d) Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer;
(e) Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;
(f) Limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, of the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or of any other information requested by a party to remain confidential; and
(g) Any additional duties that are mutually agreed to with a party.

Thank you, and please let me know when you have a moment!

Best,
Sam

Do I need to send out a new agency disclosure form?

Typically no, because most agency disclosure forms do not address for this type of situation. For example, in New York there would be no point in sending out a new NY agency disclosure form because there is no option to check for a buyer representing two different buyers on the same property.

For example, what is wrong about the below email which was sent by a NYC real estate agent who just found out a second buyer client is interested in a listing?

Dear valued buyer client,

We wish to inform you that other buyer client(s) of our brokerage firm and/or affiliated brokerage firms have also expressed interested in 150 East 75th Street #2D, New York, NY 10075 which you wish to see.

We have barriers in place between affiliated firms that prohibit discussion of confidential client information, just like you would expect between unrelated firms. Furthermore, as an agent I have no knowledge or way to ascertain information about clients and deal statuses at affiliated firms. Lastly, my Principal Broker does not personally involve himself with individual transactions as you know, and strictly recuses himself from any transaction where any potential conflict of interest might occur.

While we have asked REBNY legal counsel for further guidance, we believe this situation can be addressed by sharing a new agency disclosure form which explains that we are a dual agent with respects to this listing, any any further such situations which might arise.

Per the agency disclosure form, you can rest assured that we will treat all parties fairly, and not disclose confidential information that might harm the interests of any client. Please read the disclosure form over and let us know if you have any questions.

I would love to continue working with you, and all of the above won’t matter if it turns out you’re not interested in this specific listing anyway. What do you think?

As we established earlier, NY courts have ruled that an agent cannot represent two buyers on the same property, so if the buyers were to express anything beyond casual interest in the property then the agent would have to assign one of the buyers to another team member.

Secondly, dual agency is not the type of agency relationship that would be established even if it were allowed in New York to represent two buyers on the same listing.

As the former legal counsel for a major real estate association in New York told us, “dual agency occurs when a brokerage is representing both the buyer and the seller of a listing (or the landlord and the tenant), not two different buyers.”

At some of the larger brokerage firms with thousands of agents in one city, it’s very likely that there will be multiple buyers represented by various agents at the firm, who are interested in one particular listing.

This situation is as unavoidable as it is common, therefore even in states like New York where the courts advocate for an abundance of caution, buyers can still work with the same firm even if they have to switch to a different agent at the firm.

Even in New York, courts have ruled that it’s okay for buyers to be re-assigned to a different agent at the same firm. That’s because they probably realize how economically unfeasible and onerous it would be if the firm had to refer the buyer to another unrelated firm altogether.

Are there risks for buyers?

No. The risks are negligible for buyers. Agents have a duty to deal with customers fairly and honestly, and that means not sharing confidential information about their clients and their offers with anyone, regardless of whether they’re another agent at the firm, or an agent at an unrelated firm.

Furthermore, the only people who might have insight into transactions across the firm are office managers, and by default their roles are typically unrelated to day-to-day execution.

This means office managers may have insight to how deals are progressing for all the agents at the firm, but the office manager’s role is typically not to be getting involved in specific offer processes for a specific deal.

Furthermore, you can expect office managers to adhere even more to ethical standards that they enforce among their team. Just like their agents, they are expected to treat customers honestly and fairly. Plus, managers and owners also have their brands and reputations to protect.

What about buyers interested in the same listing across affiliated brokerages?

In the same vein, only owners or very senior executives might have data across affiliated companies, and they presumably have even higher standards to enforce. There is even less rationale for them to not adhere by ethical standards and treat all customers fairly and honestly. Additionally, there are often “Chinese Walls” in-place between departments and affiliated companies, or protocols in place which prevent the discussion of individual transactions.