Salesperson Kai represents buyer Lena in Hawaii. During negotiations, Lena tells Kai that she is pre-approved for $800,000 but is willing to offer $750,000 first, hoping to negotiate up to $780,000 at most. The seller's agent, Broker Hana, asks Kai directly: 'What is the highest price your buyer will pay?' How should Kai respond?
Correct Answer
C) Kai must keep Lena's maximum price confidential because it is protected information under Kai's fiduciary duty of confidentiality to Lena.
As Lena's buyer's agent, Kai owes Lena a fiduciary duty of confidentiality. This duty specifically protects the client's negotiating position, including the maximum price the buyer is willing to pay. Under Hawaii Administrative Rules Title 16, Chapter 99 and HRS Chapter 467, a buyer's agent must not disclose information that would damage the client's negotiating position without the client's consent. Revealing Lena's maximum price to the seller's agent would be a direct breach of this duty.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Agency Question
Background Knowledge for Agency
Real World Application in Agency
Common Mistakes to Avoid on Agency Questions
Related Topics & Key Terms
Key Terms:
More Agency Questions
Under agency law in Nevada, dual agency is:
A South Dakota agent who represents a buyer learns that the seller is facing foreclosure. The agent should:
Oregon broker Olivia is working with buyer couple Derek and Sarah. During their first meeting, Derek and Sarah ask Olivia who she represents in the transaction. Under Oregon law, when is Olivia required to provide a written agency disclosure to Derek and Sarah?
Missouri continuing education (CE) requirements for license renewal include:
A Louisiana salesperson asks about a person engages professional advice and services of a licensee as an agent. What is the best answer?
- → How is implied agency most commonly created?
- → A listing broker owes fiduciary duties to which party?
- → Information about the lowest price a seller will accept is:
- → A buyer's agent in New York owes the seller:
- → The Wisconsin exclusive right-to-sell listing agreement guarantees:
- → When a licensed real estate agent wishes to purchase a property listed with their brokerage for their own account, what must they do?
- → Oregon broker James lists a home for sellers Greg and Helen. After the listing agreement is signed, buyer Natalie contacts James directly and says she wants to make an offer on the property without using her own agent. James would like to enter into a disclosed limited agency arrangement. Which of the following actions is required before James can legally proceed as a disclosed limited agent?
- → Utah recognizes which agency relationships?
- → Agency terminates by all of the following EXCEPT:
- → New Jersey continuing education requirements include: