Affiliate Broker Paul is working with buyer client Anna. Anna asks Paul whether the seller would accept a price lower than the listing price. Paul knows from his conversations with the listing agent that the seller is under financial pressure and would likely accept $20,000 below asking. Paul discloses this information to Anna. Anna is delighted and submits a lowball offer. Has Paul acted appropriately under Tennessee's agency disclosure and duty rules?
Correct Answer
A) Yes, because Paul's fiduciary duty to Anna as her buyer's agent requires him to share all information that benefits her
Under Tenn. Code Ann. § 62-13-401 et seq., a buyer's agent in Tennessee owes full fiduciary duties to the buyer, including the duty of loyalty and the duty to disclose all information that is in the buyer's interest. Paul is Anna's agent; his primary obligation is to her. Information about the seller's financial pressure and likely acceptance of a lower price is directly relevant to Anna's negotiating position and must be disclosed to her as part of Paul's fiduciary duty. This is not confidential information belonging to Paul — it was shared by the listing agent in the course of negotiation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
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