A California buyer's agent helps their client submit an offer on a property. After the offer is accepted, the agent learns that a nearby freeway expansion project will significantly increase traffic noise near the property. The closing has not yet occurred. Under the agent's fiduciary duty, what must the agent do?
Correct Answer
A) Disclose the freeway expansion information to the buyer immediately, as it is a material fact that could affect the buyer's decision
The agent's fiduciary duty to disclose material facts continues throughout the entire transaction, not just until the offer is accepted. A nearby freeway expansion that will significantly increase traffic noise is a material fact that could affect the buyer's decision to proceed, renegotiate, or cancel (if contingencies allow). The agent must disclose this information promptly.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
More Laws Of Agency Fiduciary Duties Questions
A property sold for $450,000. The commission rate was 6%. If the listing broker received 60% of the total commission, how much did the listing broker receive?
An individual who is not employed by the client, but has been delegated agency duties by an agent of the client, is referred to as a(n):
What are the three steps of the agency disclosure in proper chronological order?
An agent needs to disclose a conflict of interest to the affected parties when a principal or service provider in the transaction is the agent’s:
A broker who simultaneously represents the best interests of both opposing parties in a transaction is known as a(n):
- → When showing a listed residential property of one to four dwelling units to potential buyers, the listing broker is required to disclose:
- → Broker fees deposited with the broker before they are earned are called:
- → A real estate broker is subject to disciplinary action from the Department of Real Estate (DRE) if they:
- → The seller states they will accept the buyer’s offer if the broker lowers their 6% commission by 25%. If the broker accepts, they will receive:
- → When a broker wants to store documents electronically, the storage method may not allow the final documents to be altered. What method of electronic document storage is required by the Department of Real Estate (DRE)?
- → A broker receives a full price offer on a house they are listing. Before they present the offer to the seller, another broker brings in an all cash offer for $5,000 less. The listing broker is to:
- → A seller’s broker needs to disclose:
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- → If a 16-year-old emancipated minor wishes to sell real property, their broker may:
- → A broker who fails to promptly disclose their dual agency status is subject to:
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