Agency
A buyer's agent discovers that their buyer-client has a maximum budget of $300,000 but the seller is asking $280,000. Under buyer agency, the agent should:
ADisclose the buyer's maximum budget to the seller to expedite the sale
BKeep the buyer's financial limit confidential and negotiate in the buyer's best interest✓ Correct
CWithdraw from the transaction to avoid conflict
DDisclose it only if the seller's agent asks directly
Explanation
A buyer's agent owes the duty of confidentiality to the buyer-client. Disclosing the buyer's maximum budget would breach that duty and could harm the buyer's negotiating position.
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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.
Buyer's AgentA real estate licensee who represents the buyer's interests in a transaction, owing fiduciary duties to the buyer.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
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