AgencyIntermediateCalifornia Exam

Under California law, a real estate agent's duty to disclose applies to which of the following?

AOnly defects that are visible from the street, per standard fiduciary practice in the industry
BMaterial facts that affect the value or desirability of the property that the agent knows or should knowCorrect
COnly defects that the seller has personally disclosed to the agent, under standard California agency practice
DDefects discovered by a third-party inspector, not the agent, as commonly applied in brokerage relationships

Why Material facts that affect the value or desirability of the property that the agent knows or should know Is Correct

Answer B: Material facts that affect the value or desirability of the property that the agent knows or should know

Agents must disclose all material facts known to them or discoverable through a reasonably diligent inspection. A material fact is anything that might influence the buyer's decision or affect the property's value — whether or not the seller has disclosed it to the agent.

Exam Tip: Agency

Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.

Key Agency Terms in This Question

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