Texas Real Estate Sales Agent ExamAgencyMedium
A buyer's agent discovers that the property their client is interested in purchasing has a history of significant foundation issues that were recently repaired. This information was not disclosed in the seller's disclosure notice but was found in public records. What is the buyer's agent's primary duty regarding this discovery?
- ADisclose the information to the buyer immediately and advise them on next steps.
- BAdvise the buyer to proceed with the purchase, as the issues have been repaired.
- CInform the listing agent that the information was found and ask them to update the disclosure.
- DKeep the information confidential to avoid alarming the buyer unnecessarily.
Show answer & explanationAnswer & explanation
Correct answer: A. Disclose the information to the buyer immediately and advise them on next steps.
The buyer's agent has a fiduciary duty to disclose all material facts to their client. Foundation issues, even if repaired, are a material fact that could influence the buyer's decision. The agent must inform the buyer and advise them on how to proceed, such as further investigation or negotiation.
Why the other options are wrong
- B. Advising to proceed without full disclosure and consideration of the implications is a breach of the agent's duty.
- C. While the listing agent should update disclosures, the buyer's agent's primary duty is to their own client.
- D. Withholding material information violates the duty of disclosure to the client.
Disclosure of Material Facts to Client
An agent's fiduciary duty to reveal all known facts that are significant enough to influence a reasonable person's decision regarding the transaction, to their client.
- Applies to all information, not just what's in disclosures.
- Agent must actively seek out relevant information.
- Duty exists even if the other party is unaware or hasn't disclosed.
Memory trick: Disclosure is like shining a bright light on all important facts for your client.