Agency
If a buyer's agent learns that the buyer's maximum budget is $250,000 while the listing is priced at $230,000, the agent should:
ADisclose the buyer's maximum budget to the seller to facilitate the sale
BKeep the buyer's financial information confidential✓ Correct
CSuggest the buyer offer the full $250,000
DWithdraw from the transaction
Explanation
A buyer's agent has a fiduciary duty of confidentiality to the buyer. Disclosing the buyer's maximum budget to the seller would breach that duty and could harm the buyer's negotiating position.
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Key Terms to Know
Fiduciary Duty
The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
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.
Seller's Agent (Listing Agent)A real estate licensee who represents the seller's interests, markets the property, and owes fiduciary duties to the seller.
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