Agency
A listing agent discovers structural damage to the foundation that the seller has not disclosed. The agent's obligation is to:
AKeep it confidential to protect the seller
BDisclose the material defect to prospective buyers✓ Correct
CRecommend the seller raise the price to account for repairs
DWithdraw from the listing
Explanation
Even a listing agent has a duty to disclose known material defects to prospective buyers. The duty of loyalty to the seller does not override the duty to disclose material facts that affect the property's value or desirability.
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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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