A listing agent sees obvious water staining and a sagging ceiling in a home she has listed, but says nothing to prospective buyers because the seller does not want the issue mentioned. Which duty has the agent violated?
Correct Answer
A) The duty to disclose known material facts
A licensee owes buyers disclosure of material facts about the property's condition that she knows, and she plainly knows about staining and a sagging ceiling she has seen. The duty of obedience covers only lawful instructions, so a seller's request to conceal a defect is one the agent must refuse rather than follow. By going along with it she withheld a material fact and violated the disclosure duty.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
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