Agency
A Rhode Island buyer's agent discovers that the seller has failed to disclose a basement flooding issue. What is the agent's primary obligation?
AKeep the information confidential to avoid disrupting the sale
BAdvise the buyer of the known material defect so they can make an informed decision✓ Correct
CReport the seller to the police
DNegotiate a lower price without telling the buyer the reason
Explanation
A buyer's agent who discovers an undisclosed material defect must advise their buyer-client. Even though the agent represents the buyer (not the seller), they also may not participate in concealing material information from any party.
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Key Terms to Know
Buyer's Agent
A real estate licensee who represents the buyer's interests in a transaction, owing fiduciary duties to the buyer.
LienA 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.
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