Texas Real Estate Sales Agent ExamTexas Real Estate LawHard
A real estate sales agent is assisting a seller with completing the Seller's Disclosure Notice. The seller informs the agent that they are unaware of any defects, but the agent personally observed a significant crack in the foundation during the initial walkthrough. What is the agent's MOST appropriate course of action?
- AAdvise the seller to mark 'unknown' for the foundation condition and proceed.
- BRecommend the seller obtain a structural engineer's report before completing the disclosure.
- CInstruct the seller to disclose the crack, as the agent has a duty to disclose known material facts.
- DNote the crack in the agent's own files but allow the seller to complete the form as they see fit.
Show answer & explanationAnswer & explanation
Correct answer: C. Instruct the seller to disclose the crack, as the agent has a duty to disclose known material facts.
Real estate agents in Texas have an independent duty to disclose any known material facts about a property to a prospective buyer, regardless of whether the seller discloses them. The agent must ensure the seller is aware of their obligation to disclose and should advise them to include the known defect.
Why the other options are wrong
- A. Advising 'unknown' when a defect is known is misleading and a violation of disclosure duties.
- B. While obtaining a report is a good idea, the immediate duty is to disclose the known defect, not delay the disclosure until a report is obtained.
- D. Merely noting it in personal files is insufficient; the agent has an affirmative duty to ensure disclosure to potential buyers.
Agent's Duty of Disclosure (Texas)
Real estate licensees in Texas have an independent duty to disclose any known material facts about a property to all parties, especially defects, regardless of seller's disclosure.
- Applies to all known material facts, not just those from the seller.
- Duty exists even if the seller is exempt from providing a disclosure notice.
- Failure to disclose can lead to disciplinary action by TREC and civil liability.
Memory trick: Agents must 'Reveal Real Defects, Regardless'.