A real estate agent is showing a property to a potential buyer. The agent knows that the seller has previously instructed them not to disclose a minor, non-material defect in the property's plumbing system. The buyer asks directly if there are any known issues with the plumbing. What should the agent do?
- ATell the buyer that they cannot answer that question.
- BState that they are not aware of any issues, as it's non-material.
- CSuggest the buyer hire a home inspector to find out.
- DDisclose the known plumbing issue to the buyer.
Show answer & explanationAnswer & explanation
Correct answer: D. Disclose the known plumbing issue to the buyer.
Real estate agents have a duty to disclose all known material facts that affect the value of residential property and are not readily observable, regardless of seller instructions. While this question states 'non-material,' if the buyer specifically asks, and the agent knows, ethical and legal obligations often lean towards disclosure, especially in Florida where agents are expected to deal honestly and fairly. The scenario implies the agent 'knows' of a defect, making direct disclosure the most ethical and legally sound choice, even if the seller deemed it 'non-material,' as the buyer's direct question makes it material to them.
Why the other options are wrong
- A. Refusing to answer a direct question about known defects can be seen as evasive and potentially unethical or even a misrepresentation by omission.
- B. This would be a misrepresentation, as the agent is aware of the issue.
- C. While a home inspection is always recommended, it does not absolve the agent of their duty to disclose known facts when directly asked.
Agent's Duty of Disclosure
A real estate agent's obligation to reveal all known material facts concerning the property that are not readily observable to the buyer.
- Applies to all known material facts
- Must disclose even if seller requests not to
- Duty to deal honestly and fairly
Memory trick: Reveal what you Know, it's the Right thing to Show.