Broker Paul is a transaction broker in Colorado assisting both the buyer and the seller of a residential property in Colorado Springs. The seller privately tells Paul that she is under significant financial pressure and will accept $15,000 below the listing price. What must Paul do with this information under Colorado's transaction broker rules?
Correct Answer
A) Paul must keep the seller's financial motivation confidential and not disclose it to the buyer
Under Colorado's transaction broker statute (C.R.S. § 12-10-407), a transaction broker owes both parties a duty of confidentiality regarding information that one party has asked to be kept confidential or that would harm a party's bargaining position if disclosed. The seller's financial motivation and willingness to accept a lower price is exactly the type of confidential information a transaction broker must protect. Disclosing it to the buyer without the seller's consent would violate the transaction broker's duties.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
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