Texas Real Estate Sales Agent ExamTexas Real Estate LawMedium
A buyer's agent, working under an exclusive buyer representation agreement, discovers a significant structural defect during a property showing that the seller's disclosure statement did not mention. What is the buyer's agent's primary ethical and legal obligation regarding this discovery?
- AAdvise the buyer to proceed with the offer and negotiate a lower price.
- BInform the buyer immediately and recommend further inspection by a professional.
- CNotify the seller's agent directly and demand they update the disclosure.
- DKeep the defect confidential to avoid jeopardizing the sale.
Show answer & explanationAnswer & explanation
Correct answer: B. Inform the buyer immediately and recommend further inspection by a professional.
A buyer's agent has a fiduciary duty to act in the best interest of their client, which includes disclosing all material facts that could affect the buyer's decision. Recommending further professional inspection is part of this duty.
Why the other options are wrong
- A. This may not be in the buyer's best interest without full understanding of the defect.
- C. While the seller should update disclosures, the agent's primary obligation is to their own client first.
- D. This would be a breach of fiduciary duty and potentially unethical/illegal.
Agent's Fiduciary Duty of Disclosure
The obligation of a real estate agent to reveal to their client all material facts and information that could affect the client's decision-making process.
- Applies to all material facts
- Must be timely and complete
- Crucial for client's informed consent
Memory trick: An agent's OLD CAR safely drives their client's interests.