In Washington, broker Chen represents buyer Olivia as a client. The seller is unrepresented. Olivia asks Chen whether the seller would accept $310,000 instead of the listed $325,000. Chen knows from a conversation with the seller that the seller is under financial pressure and needs to close quickly. Under RCW 18.86, what must Chen do with this information?
Correct Answer
A) Chen must disclose the seller's financial pressure to Olivia because it is a material fact relevant to negotiations
Under RCW 18.86.040(1)(d), a broker representing a buyer as a client must disclose all material facts known to the broker that are not apparent or readily ascertainable by the buyer. The seller's financial pressure and urgency to close quickly is a material fact that directly affects the buyer's negotiating position. Because Chen represents Olivia (not the seller), his primary duty of disclosure runs to Olivia, and he must share this information with her.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
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.
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