Broker Paul represents seller Diana in the sale of her Federal Way home. Buyer Ben, who is unrepresented, submits an offer. During negotiations, Ben directly asks Paul: 'Is Diana willing to accept $15,000 below list price?' Paul knows Diana has already told him she would accept anything within $20,000 of list price. Under RCW 18.86, what is Paul's BEST course of action?
Correct Answer
D) Decline to reveal Diana's specific bottom line and suggest Ben submit his best offer, while maintaining Diana's confidential information
Under RCW 18.86.040, Paul owes Diana a duty of confidentiality, which specifically includes not disclosing the seller's minimum acceptable price or negotiating parameters without her consent. Paul must decline to reveal Diana's bottom line. However, Paul still owes Ben good faith and honesty as a customer under RCW 18.86.030 — he should not lie or be deceptive, but he can appropriately decline to share confidential client information and encourage Ben to submit his best offer. This balances Paul's duty of confidentiality to Diana with his good faith obligation to Ben.
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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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