While showing a property, the listing agent voluntarily tells a buyer's agent that the seller is going through a divorce and must sell quickly. Under New York agency law, what is the buyer's agent's obligation regarding this information?
Correct Answer
A) Disclose the information to the buyer, because a buyer's agent has a fiduciary duty to share material information that may affect negotiations
Under New York agency law, a buyer's agent owes fiduciary duties to the buyer, including the duty of disclosure. This requires the agent to share any material information that could affect the buyer's decisions or negotiating position. Information about seller motivation — such as financial pressure from a divorce — is material because it may indicate the seller's willingness to accept a lower price or expedited terms. Critically, this information is not confidential: it was voluntarily disclosed by the listing agent, not protected by any agency relationship the buyer's agent owes to the seller. The buyer's agent therefore has an affirmative obligation to pass it along to the buyer.
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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.
More Agency Relationships Disclosures Questions
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Under New York's Property Condition Disclosure Act, how is the $500 credit amount determined when a seller elects not to provide the Property Condition Disclosure Statement?
Acting as a dual agent in New York, an agent has presented a below-asking-price offer that the seller rejected. The seller then asks the agent what the buyer's maximum budget is. How should the dual agent respond?
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- → When acting as a dual agent in New York, which type of information can an agent share with both parties?
- → Agent David represents seller Susan in New York City. Susan asks David about the current market conditions for co-op apartments in her neighborhood. This type of information falls under which of David's duties to Susan?
- → A buyer's agent in New York never disclosed that a listed property was the site of a homicide. The buyer later discovers this and threatens legal action against the agent for failing to disclose it. What is the agent's strongest legal defense?
- → Under New York's agency disclosure law, which of the following constitutes 'first substantive contact' that would trigger the disclosure requirement?
- → Under NY Real Property Law §443, at what point must a real estate agent provide the agency disclosure form to a prospective buyer during an initial property visit?
- → Lisa, a seller's agent in New York, discovers that her client failed to disclose a known foundation crack in the basement on the Property Condition Disclosure Statement. The seller had mentioned this issue to Lisa during the listing appointment but chose not to disclose it. What is Lisa's primary obligation under New York law?
- → In New York, before a real estate agent can act as a dual agent representing both buyer and seller, what must occur?
- → Under New York's Property Condition Disclosure Act, a seller who chooses not to complete and deliver a Property Condition Disclosure Statement to the buyer must do which of the following?
- → A New York licensee is acting as a dual agent and receives simultaneous offers on the listed property from two different buyers, both of whom the agent also represents. Which obligation is most specifically implicated by the dual agency relationship in this situation?
- → Michael is a buyer's agent in New York. His client makes an offer on a property listed by another agent in his same brokerage. The listing agent becomes unavailable, and Michael's broker asks him to also represent the seller to complete the transaction. What must happen for Michael to legally represent both parties?
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A buyer's agent is preparing her client for a co-op board interview. During the interview, a board member asks the buyer about his religious practices. What is the agent's obligation regarding this type of question?
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Lisa is a buyer's agent in New York representing first-time homebuyer Tom. Tom asks Lisa whether he should have the property inspected before closing. Under New York law, how should Lisa respond?