Agency
Which of the following is the BEST example of a material fact that must be disclosed to a buyer?
AThe seller's reason for moving
BThe buyer's loan terms
CA known structural defect in the foundation✓ Correct
DThe neighborhood's average income level
Explanation
A material fact is any fact that would likely affect a reasonable buyer's decision to purchase or the price they would pay. A known structural defect (such as a cracked foundation) is clearly material.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
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