Licensee Paula is showing a property listed by her brokerage to buyer Kevin. Kevin has not signed a buyer representation agreement. During the showing, Kevin confides to Paula that he is willing to pay up to $285,000 even though his initial offer will be $260,000. Under Nebraska agency law, what is Paula's obligation regarding this information?
Correct Answer
C) Paula must disclose Kevin's maximum price to the seller because Paula's brokerage represents the seller as the listing agent
Under Nebraska agency law, Paula's brokerage is the listing agent for the seller. Without a signed buyer representation agreement, Kevin is a customer, not a client, of Paula's brokerage. Paula's fiduciary duties — including loyalty and the duty to disclose material information — run to the seller, not to Kevin. Therefore, Kevin's disclosed willingness to pay up to $285,000 is information that materially benefits the seller, and Paula as the seller's agent has a duty to disclose it to the seller. This is a critical distinction between agency relationships and customer service in Nebraska.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.
The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.
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