A buyer's agent learns that their client has been pre-approved for $500,000 but the client has instructed them to only look at properties under $400,000. The seller's agent asks about the buyer's maximum budget. How should the buyer's agent respond?

Q: What is the correct answer to: A buyer's agent learns that their client has been pre-approved for $500,000 but the client has instructed them to only look at properties under $400,000. The seller's agent asks about the buyer's maximum budget. How should the buyer's agent respond?

The correct answer is State that the buyer is looking at properties under $400,000. Option B is correct because it respects client confidentiality while providing truthful information about the client's authorized search parameters. Under TRESA and provincial regulations, agents must maintain confidentiality of client information unless specifically authorized to disclose it. The buyer has instructed the agent to look at properties under $400,000, which represents the client's stated and authorized search criteria. Sharing this information is both truthful and within the scope of what the client has authorized the agent to act upon.

Q: What background knowledge is needed for this Agency & Professional Ethics question?

Agency relationships in Canadian real estate are governed by fiduciary duties, including loyalty, confidentiality, disclosure, obedience, and accounting. Under TRESA (Ontario), RESA (Alberta), and similar provincial legislation, agents must maintain strict confidentiality of all client information unless specifically authorized to disclose it. Client confidentiality extends to all personal and financial information shared during the agency relationship. Agents must distinguish between information they're authorized to share versus confidential information that must be protected, even when dealing with other real estate professionals.

Q: What is a good way to remember the answer to this Agency & Professional Ethics question?

Remember CLIENT SAYS: 'C'onfidential information stays confidential, 'L'imited to what client 'I'nstructed, 'E'xact 'N'umbers stay 'T'op secret unless client 'SAYS' you can share. Only share what the client has specifically authorized or instructed you to act upon. When facing confidentiality questions, ask yourself: 'What has the CLIENT specifically SAID I can share or act upon?' This helps distinguish between confidential information (pre-approval amount) and authorized actions (search parameters).

Q: What exam tip applies to this Agency & Professional Ethics question?

Look for what the client has specifically authorized or instructed the agent to do. Share only information that falls within those authorized parameters, never confidential details that exceed the client's instructions.

Q: How does this Agency & Professional Ethics concept apply in real world practice?

A buyer gets pre-approved for $800,000 but tells their agent to only show homes under $650,000 because they want to save money for renovations and have a financial cushion. When the listing agent asks about the buyer's budget during a showing, the buyer's agent should only mention the $650,000 search parameter, not the higher pre-approval amount. This protects the buyer's negotiating position and respects their confidentiality while still providing useful information to facilitate the transaction.

Question

Agency & Professional EthicsConfidentialityMEDIUM

A buyer's agent learns that their client has been pre-approved for $500,000 but the client has instructed them to only look at properties under $400,000. The seller's agent asks about the buyer's maximum budget. How should the buyer's agent respond?

Answer Options

A

Disclose the full pre-approval amount of $500,000

B

State that the buyer is looking at properties under $400,000

C

Refuse to provide any financial information

D

Suggest the seller's agent contact the buyer directly