A Colorado buyer's broker discovers a significant sinkhole risk on the property their client is about to buy. The broker must:
Why B. Immediately disclose this to the buyer, as it is a material fact adversely affecting the value and desirability of the property Is Correct
Answer B: B. Immediately disclose this to the buyer, as it is a material fact adversely affecting the value and desirability of the property
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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Key Terms to Know
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
AgencyA 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.
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