Agency
A buyer's broker who learns that their client has a maximum budget of $400,000 but the client is offering $360,000 on a property must:
ADisclose the buyer's maximum budget to the seller to speed up negotiations
BKeep the buyer's maximum budget confidential from the seller✓ Correct
CInform the listing broker of the buyer's true financial capacity
DWithdraw from the transaction to avoid a conflict of interest
Explanation
A buyer's broker owes a duty of confidentiality to the buyer. The buyer's maximum budget is confidential information that must not be disclosed to the seller or the seller's agent, as it would harm the buyer's negotiating position.
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Key Terms to Know
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.
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.
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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