Maryland licensee Sandra is a seller's agent for the Johnsons. A buyer, unrepresented by an agent, submits a full-price offer with no contingencies. Sandra knows the Johnsons have received a separate, slightly lower offer from a buyer with a strong pre-approval letter. The Johnsons instruct Sandra to accept the full-price offer without presenting the second offer. Under Maryland fiduciary duty law, what should Sandra do?
Correct Answer
B) Present both offers to the Johnsons and advise them of the relative merits of each before they make a final decision
While the duty of obedience requires following lawful client instructions, a seller's agent in Maryland also owes a duty of reasonable care and disclosure. The instruction not to present a competing offer before making a decision is not a lawful instruction that Sandra must blindly follow — it may actually harm the Johnsons by depriving them of information they need to make the best decision. Sandra's duty of reasonable care requires her to ensure the Johnsons are fully informed before they make an irrevocable acceptance. She should present both offers and provide professional counsel so the Johnsons can make an informed choice. Accepting without presentation could expose Sandra to liability if the Johnsons later claim they were not properly advised.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
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