California Real Estate SalespersonLaws of Agency and Fiduciary DutiesMedium
A broker represents both the buyer and seller as a disclosed dual agent. The seller privately tells the broker she would accept as little as $410,000, though the listing price is $450,000. Without the seller's further authorization, what may the broker disclose to the buyer?
- ANothing at all, including the fact that any negotiation is possible
- BThat the seller has indicated some flexibility, without stating the specific amount
- CThe seller's minimum price only if the buyer directly asks
- DThe seller's minimum acceptable price of $410,000
Show answer & explanationAnswer & explanation
Correct answer: A. Nothing at all, including the fact that any negotiation is possible
As a dual agent, the broker owes confidentiality to both parties regarding price negotiating positions unless the client expressly authorizes disclosure. Even a vague hint that flexibility exists would breach the confidential price information entrusted by the seller, so the broker must disclose nothing about it absent authorization.
Why the other options are wrong
- B. Incorrect; even a hint of flexibility reveals confidential negotiating information without consent.
- C. Incorrect; being asked directly does not waive the seller's confidentiality right.
- D. Incorrect; disclosing the exact confidential price breaches fiduciary confidentiality.
Dual Agency Confidentiality
A dual agent must keep each principal's confidential information, especially price limits, secret from the other party unless expressly authorized to disclose it.
- Confidentiality survives even in dual agency.
- Price limits are classic protected information.
- Disclosure requires express client authorization.
Memory trick: A dual agent's lips are sealed on price unless the client unseals them.