Carlos is a licensed salesperson at Horizon Realty NJ. He is showing a listed property to a buyer customer, Diane, who has not signed any buyer representation agreement. During the showing, Diane tells Carlos that she is willing to pay up to $420,000, even though she plans to offer $390,000. Which of the following best describes Carlos's obligation regarding this information?
Correct Answer
B) Carlos must disclose Diane's maximum price to the seller because Carlos represents the seller as a subagent
In New Jersey, when a salesperson holds a listing and shows it to an unrepresented buyer (or when the salesperson is acting as a subagent of the seller), the licensee's fiduciary duties run to the seller. Diane has not signed a buyer representation agreement, so Carlos represents the seller. Material information about the buyer's willingness to pay — including her maximum price — must be disclosed to the seller as part of Carlos's duty of loyalty and disclosure to his principal.
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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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