When presenting an offer from a former college roommate, what should the broker disclose if they know the buyer will increase their offer?

When a broker is aware that a potential buyer is willing to increase their offer, it is important to disclose this information to the seller. This is because the broker has a fiduciary responsibility to act in the best interests of their client, which, in this case, is the seller. By informing the seller that the buyer is willing to pay more, the broker allows the seller to make an informed decision on how to respond to the current offer.

Disclosing the possibility of a higher offer can be crucial for the seller, as it may influence their negotiations and strategies. The seller may choose to counter the current offer, hold out for a better deal, or reject it altogether. The essential factor is transparency; failing to share this information could jeopardize the seller's ability to maximize their financial return on the sale.

In contrast, keeping information confidential would hinder the seller's negotiation power. Instructing the buyer to make a higher offer immediately removes agency from the seller in determining their response. Advising the seller to reject the offer could close off a potentially beneficial negotiation without considering all the facts. Thus, informing the seller about the buyer’s willingness to pay more is the most ethical and effective approach in this scenario.