In a state whose law allows an agent to act for both the vendor and the purchaser with disclosure and consent (NSW, Queensland and SA do not), an agent doing so is told in confidence by the purchaser that their maximum budget is $50,000 above their current offer. What should the agent do?
Correct Answer
C) Keep the purchaser's budget confidential and not disclose it to the vendor
In dual agency the agent owes confidentiality to both parties, so information one party gives in confidence cannot be passed to the other, directly or by using it to shape a counter-offer. Several states restrict or prohibit an agent acting for both parties in the one transaction, which is one reason dual agency is rare in residential sales.
Why This Is the Correct Answer
Once an agent acts for both parties with their consent, it owes each of them confidentiality. The purchaser's maximum budget was given in confidence, so the agent must not reveal it or use it against the purchaser.
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