New York Real Estate Salesperson ExaminationNew York State Specific Laws and RegulationsMedium
A New York real estate salesperson is representing a buyer interested in a property. During negotiations, the seller's agent inadvertently discloses to the salesperson that the seller is highly motivated to sell quickly due to an impending job relocation and would accept a lower offer than listed. What is the salesperson's ethical obligation to their buyer client regarding this information?
- AThe salesperson should advise their buyer client to make an offer at the listed price to avoid ethical issues.
- BThe salesperson must disclose this information to their buyer client to help them negotiate a better price.
- CThe salesperson should keep this information confidential, as it was inadvertently disclosed.
- DThe salesperson should only disclose this information if the seller's agent provides written permission.
Show answer & explanationAnswer & explanation
Correct answer: B. The salesperson must disclose this information to their buyer client to help them negotiate a better price.
As a buyer's agent, the salesperson owes their client the fiduciary duty of loyalty, which includes acting in the client's best interests and disclosing all material information. Information about the seller's motivation is material and must be passed on to the buyer, regardless of how it was obtained.
Why the other options are wrong
- A. Advising a client to pay more than necessary violates the duty of loyalty and best interests.
- C. The duty of loyalty to the buyer client overrides confidentiality to the seller in this scenario.
- D. Written permission from the seller's agent is not required; the duty is to the buyer client.
Fiduciary Duty of Loyalty (Buyer's Agent)
A buyer's agent in New York has a fiduciary duty of loyalty to their client, requiring them to act solely in the buyer's best interests, including disclosing all material information that could benefit the buyer.
- Act solely in client's best interest.
- Disclose all material facts.
- Prioritize client's needs above all others.
Memory trick: Loyalty's 'CORE' means 'DISCLOSE' all for YOUR client's 'GAIN'.