What background knowledge is needed for this Agency question?

Oregon's disclosed limited agency framework was designed to strike a balance between two competing policy goals: allowing brokerages to serve both sides of a transaction (which serves market efficiency) and protecting consumers from having their agent work against their interests (which serves consumer protection). The limitation on negotiation strategy advice reflects the legislature's recognition that the most dangerous moment in a limited agency relationship is when one party asks the agent to leverage confidential knowledge about the other party. ORS 696.840 draws a bright line at that moment, prohibiting strategic advocacy while permitting factual assistance.

What is a good way to remember the answer to this Agency question?

Visualize Samantha as a referee standing between two tennis players, Grant and Teresa. A referee can hand each player factual information — the score, the rules, the court dimensions — but cannot whisper to one player where the other intends to serve next. The CMA is the score sheet: objective, factual, and available to both sides. Grant's minimum acceptable price is the secret serve strategy: confidential and off-limits. When in doubt, ask yourself whether Samantha is handing out score sheets or whispering serve strategies.

What exam tip applies to this Agency question?

For disclosed limited agency questions involving advice or information requests, use a two-part test: first, is the information factual and objective (like market data), or is it strategic and derived from one party's confidential communications? Second, would sharing the information give one party a negotiating advantage based on the other party's private situation? If the answer to the second question is yes, the limited agent must decline. Answer choices that describe providing CMAs or market data are almost always correct in this context.

How does this Agency concept apply in real world practice?

Teresa is considering offering $480,000 on Grant's home, which is listed at $499,000. She asks Samantha, 'You know Grant — what's the lowest he'd take?' Samantha knows from her earlier conversations with Grant that he is carrying two mortgages and would accept anything above $470,000, but she cannot share this. Instead, Samantha pulls up recent comparable sales in the neighborhood showing that similar homes have sold between $475,000 and $490,000, presents this CMA to Teresa, and says, 'Based on current market data, here is what comparable properties have sold for — this should help you make an informed decision about your offer.' Samantha has provided genuine value to Teresa without breaching her limited agent obligations to Grant.

AgencyAgency_types_sellers_buyers_disclosed_limitedHARD

Oregon broker Samantha is acting as a disclosed limited agent for both seller Grant and buyer Teresa in the same transaction, with written consent from both parties. During negotiations, Teresa asks Samantha, 'What do you think I should offer to make sure Grant accepts?' Under Oregon law, how should Samantha respond?

Correct Answer

A) Samantha should provide Teresa with a comparative market analysis and factual market data but cannot advise Teresa on negotiating strategy against Grant

Under ORS 696.840, a disclosed limited agent may provide factual information and market data to both parties but cannot advocate for either party's negotiating position against the other. Samantha can share a comparative market analysis (CMA) and objective market data to help Teresa make an informed decision, but she cannot use her knowledge of Grant's confidential information to advise Teresa on how to structure an offer to 'make sure Grant accepts.' This distinction between factual assistance and strategic advocacy is central to disclosed limited agency.

Answer Options

Samantha should provide Teresa with a comparative market analysis and factual market data but cannot advise Teresa on negotiating strategy against Grant

Samantha must refuse to provide any assistance to Teresa on pricing because disclosed limited agents cannot help either party

Samantha should recommend a specific offer price based on her knowledge of Grant's minimum acceptable price

Samantha should refer Teresa to an attorney because only attorneys can advise on offer strategy in Oregon

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Related Concepts

Gratuitous Agency

An agency relationship where the agent agrees to act on behalf of the principal without receiving compensation.

Implied Agency

An agency relationship created by the conduct or actions of the parties rather than by a written or oral agreement.

Material Fact Disclosure

The legal obligation to reveal information that could affect a party's decision to enter into or the terms of a real estate transaction.

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