Thanks for the comment. What an excellent question.

There aren’t any easy answers to this one, and I’m certainly not in a position to decide if unethical conduct occurred here. That said, I’ll give you a little feedback on some of the things you’ve touched on.

It’s important to note that the agent’s behavior must first be governed by “the law” and then by the Code of Ethics. Where the law is silent, our Code of Ethics applies. Where the law is clear, the Code of Ethics is secondary.

It’s well established in common law that no contract exists until both parties to a contract have agreed in writing to the terms and conditions of the contract. Accordingly, a seller does have a right to withdraw a counter-offer prior to acceptance, and a buyer has the same right to withdraw their offer. Some buyers and seller are directed by their own “code of ethics” and occasionally you’ll find a client who will not withdraw, even when faced with a better offer. That too is their right.

You feel that the “sellers broker had price information that was shared with his other client.” There’s no doubt that he or she had that information. Sharing it with the other prospective buyer would have been a mistake both ethically and legally, at least as I see it. The highest bit of law is statute law. In this province, that’s the Real Estate Act and its associated policies and bylaws. They state that a registrant has a responsibility to treat all parties to a transaction fairly. This kind of conduct would seem unfair to me, and most likely illegal.

We will never know for sure what kind of communication occurred between the seller’s agent and the other buyer. Even if nothing overtly underhanded went on, we can see that the agent has left themselves open to questions which can’t be very good for them. However, what’s good for the agent is rarely the primary concern when it comes to agency and the law. We do have to keep in mind that the agent has some duties and responsibilities to the seller as well. As you describe the chain of events, it seems possible that this second buyer may have appeared from nowhere at the last possible moment. After all, the seller clearly had intentions of dealing with your offer as evidenced by the fact that they wrote and signed a counter-offer.

If I were to find myself in a similar situation, I would make every effort to have buyer #2 make their offer through another agent even if I had introduced them to the property at some earlier time. Once we know what we know, it’s difficult not to be influenced by that to some degree. Even if we are strong enough not to, the questions always linger after the fact. Fact is, the agent probably wouldn’t even need to make an explicit statement of “offer #1 is this much.” He or she could use gentler guidance like, “I don’t think this home will sell for that” or “are you sure you don’t want to go a little higher.” Almost any direction that was given to buyer #2 would be using your offer against you. There are many agents who have enough integrity to get through this situation without divulging information which would have favoured buyer #2. However, even if an agent comes out of this situation with a clear conscience, he or she runs the risk of a damaged reputation and there’s no amount of compensation which can cover that expense.

I admire you for removing yourself from that situation. There will be other homes.