Salesperson Kevin represents buyer Priya Patel, who is purchasing a home in Kalamazoo. During negotiations, the seller's agent asks Kevin whether Priya has been pre-approved for a mortgage. Priya has been pre-approved for up to $350,000 but has instructed Kevin not to reveal the exact approval amount. The home is listed at $320,000. What should Kevin do?
Correct Answer
A) Confirm that Priya is pre-approved but decline to disclose the specific approval amount per her instructions
Kevin must balance two fiduciary duties: the duty of obedience (following Priya's lawful instruction not to reveal the exact approval amount) and the duty not to misrepresent facts. Confirming pre-approval status without disclosing the specific amount respects Priya's instruction while avoiding active misrepresentation. The exact pre-approval ceiling is confidential negotiating information under Michigan agency law (MCL 339.2512d).
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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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