New York Real Estate Salesperson ExaminationLaws of AgencyMedium
A real estate salesperson is representing a seller. A potential buyer, who is not represented by an agent, asks the salesperson, 'What do you think is the lowest price the seller would accept for this property?' How should the salesperson respond?
- ASuggest the buyer make an offer and the seller will respond.
- BDisclose the lowest price the seller would accept, if known.
- CState that they cannot disclose confidential information about their client.
- DAdvise the buyer to obtain their own representation.
Show answer & explanationAnswer & explanation
Correct answer: C. State that they cannot disclose confidential information about their client.
The salesperson has a fiduciary duty of confidentiality to their client (the seller). The seller's lowest acceptable price is confidential information and cannot be disclosed to the customer (the unrepresented buyer). Options C and D are good general practices but B directly addresses the breach of duty.
Why the other options are wrong
- A. While a reasonable suggestion, it doesn't directly address the duty of confidentiality regarding the specific question asked.
- B. Disclosing the seller's lowest acceptable price would be a direct breach of the duty of confidentiality and loyalty to the seller.
- D. Advising the buyer to get representation is good practice, but it's not the primary, immediate response to the specific question about confidential information.
Duty of Confidentiality (Seller's Agent)
A fiduciary duty requiring a seller's agent to keep all confidential information about their client (the seller) private, even after the agency relationship ends.
- Protects client's negotiating position.
- Includes financial motivations or lowest price.
- Lasts indefinitely, even after transaction.
Memory trick: Fairness to all, but client's secrets are walls.