Texas Real Estate Sales Agent ExamAgencyEasy
A real estate sales agent is representing a buyer. The buyer instructs the agent to offer $250,000 for a property, but also mentions to the agent that they are willing to go up to $265,000 if necessary. What is the agent's primary duty regarding this information?
- AKeep the buyer's maximum willingness to pay confidential and only present the initial offer of $250,000 as instructed.
- BDisclose the buyer's maximum willingness to pay ($265,000) to the seller to facilitate a quicker sale.
- CAdvise the buyer to immediately offer the higher amount ($265,000) to secure the property.
- DInform the buyer that the agent cannot represent them if they are not transparent about their true budget with the seller.
Show answer & explanationAnswer & explanation
Correct answer: A. Keep the buyer's maximum willingness to pay confidential and only present the initial offer of $250,000 as instructed.
The duty of confidentiality is a core fiduciary duty. The agent must keep the client's financial motivations and negotiating positions confidential unless explicitly authorized by the client to disclose them. Only the instructed offer should be presented.
Why the other options are wrong
- B. Disclosing the buyer's maximum price without their consent violates the duty of confidentiality.
- C. Advising the buyer to offer a higher amount without new information or instruction might not be in the buyer's best interest and violates the instruction to offer $250,000.
- D. The agent can and must represent the buyer based on their instructions and maintain confidentiality.
Confidentiality (Fiduciary Duty)
The agent's duty to keep all client information confidential that would harm the client's negotiating position, even after the agency relationship ends.
- Applies to all information learned during the agency relationship.
- Continues even after the transaction closes or the agency terminates.
- Only waived with explicit client consent or by court order.
Memory trick: An agent's COLD ACCOunt keeps secrets and serves clients.