Agency
In New Mexico, an agent who discovers that their client has made a material misrepresentation to the other party should:
AIgnore it to protect the client
BAdvise the client to correct the misrepresentation and potentially withdraw from the transaction if they refuse✓ Correct
CReport it immediately to the NMREC
DTell the other party without informing the client
Explanation
An agent cannot participate in or allow fraud. If a client makes a material misrepresentation, the agent must advise them to correct it.
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Key Terms to Know
Lien
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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