Legal Question in Real Estate Law in California

Re: How to stay within the law when working with two buyers on the same property

You cannot represent two principals with adverse interests. You should let them both know of the problem and offer to turn them over to separate agents with respect of offers on that property. If you have a referral fee or commission sharing arrangement with the agent you turn them over to, this should be disclosed and consented to in writing. You should instruct each agent not to include you in any of the process by way of providing information or advice until a deal gets done. Once the deal is history, you can represent both buyers but not in pursuit of the same property.

Re: How to stay within the law when working with two buyers on the same property

I have been in the real estate law area for over thirty years. I am aware that you can represent both sides of the transaction, and if they agree it is not conflict of interest. I disagree with this I think it is a direct in substantial conflict of interest. Representing the buyer and seller places you in the horrible position. Most people do not really understand the form and I have represented numbers of people who have sued their agent and or broker and had been quite successful at it. Now representing two competing buyers is a whole different thing. There is no law and there are no rules as to this kind of transaction because the law does not allow for the conflict of interest in this situation. I don't know where you've got your information. I don't know if you're in agent or broker, you're still equally responsible and liable for any negligence applicable to a transaction. Am I scaring you, basically I hope so. Many of my colleagues will disagree with me but I think you place yourself into a position that you cannot help but misrepresent the facts to either or both of your clients. This same kind of misrepresentation is the kind that takes place in the buyer sellers situation. More importantly, that either know about the other and do you have to tell either about the other??? Interesting questions, which are ones that you really should find out in person from an attorney who is a real estate expert in both transactional as well as litigation matters.I have been practicing law in this legal area for over 30 years and understand your problem well. I practice in the S.F. Bay Area and if you wish to contact me call at 925-945-6000.

Re: How to stay within the law when working with two buyers on the same property

Welcome to the tight rope.

As a licensed RE Broker, as well as an attorney, I firmly believe that there should be no "double-ending" by an agent.

That being said, you have a fiduciary duty to ALL parties, and you must disclose to ALL parties that 1. you are representing the seller, and 2. you are representing 2 buyers with offers to that seller.

Other than that you tell them NOTHING. Tell them to make their best offer, and don't try to persuade your seller to one or the other. Just give them the facts regarding price, terms and how well qualified they are, based upon the lenders qualifications, not yours.