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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