A real estate salesperson in New York is representing a buyer who is very interested in a property. During negotiations, the seller's agent inadvertently reveals that the seller is desperate to sell quickly due to a pending job relocation. The buyer's agent uses this information to advise their buyer to make a significantly lower offer. Which ethical principle has the buyer's agent potentially violated?
- AFair Dealing
- BDuty of Disclosure
- CDuty of Loyalty
- DConfidentiality
Show answer & explanationAnswer & explanation
Correct answer: A. Fair Dealing
While the buyer's agent has a duty of loyalty to their client, using inadvertently disclosed confidential information about the seller's motivation, obtained from the seller's agent, to the detriment of the seller (even if not their client) can be seen as violating the broader ethical principle of fair dealing, which requires honesty and integrity in all transactions, including with other parties. The seller's agent violated confidentiality, but the buyer's agent's action, while beneficial to their client, crosses into unfair dealing.
Why the other options are wrong
- B. The duty of disclosure is owed to the agent's own client, not typically to the opposing party in this manner.
- C. The duty of loyalty is to the buyer, and making a lower offer serves that duty, but the method of obtaining the information can violate fair dealing.
- D. Confidentiality is primarily breached by the seller's agent, not the buyer's agent in this scenario, though the buyer's agent's use of that information is the issue.
Ethical Principle: Fair Dealing
Real estate licensees must treat all parties to a transaction honestly and fairly, even if they are not their direct clients, and avoid taking unfair advantage.
- Applies to all parties, not just clients.
- Requires honesty and integrity.
- Avoids taking unfair advantage of others.
Memory trick: Fair Dealing: Treat everyone fairly, even when fiercely fighting for your client.