Agency
A seller's agent discovers a material defect in the property the seller has not disclosed. The agent should:
AKeep the information confidential to protect the seller
BDisclose the defect to prospective buyers✓ Correct
CWithdraw from the listing if the seller refuses to disclose
DOnly disclose if directly asked by the buyer
Explanation
Even a seller's agent must disclose known material defects to prospective buyers. The duty to disclose material facts overrides the duty of confidentiality to the seller.
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Key Terms to Know
Agency
A 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.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
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