Salesperson Beth works for Broker Alan at Sunrise Realty. Beth is representing buyer Patrick. Patrick tells Beth that he has been pre-approved for a mortgage up to $500,000 but wants to offer $420,000 on a property listed at $450,000. Patrick instructs Beth not to reveal his maximum financing amount. The seller's agent asks Beth: 'Has your buyer been pre-approved, and for how much?' Under New Jersey agency law, which response is most consistent with Beth's obligations?
Correct Answer
B) Beth may confirm Patrick has been pre-approved but must keep the specific pre-approval amount confidential per Patrick's instructions
Under New Jersey agency law, Beth as Patrick's buyer's agent owes him the fiduciary duty of confidentiality. Patrick's maximum pre-approval amount is confidential client information—disclosing it could weaken his negotiating position significantly. Beth may confirm that Patrick is pre-approved (which is relevant to the seller's ability to assess the offer's viability) without revealing the specific dollar amount, which Patrick has explicitly instructed her to keep confidential. This approach balances honest dealing with her fiduciary duty of confidentiality to her client.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.
An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.
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