hard · National Real Estate Exam agency
A buyer's agent, acting under an exclusive buyer-representation agreement, learns from a third party that the listing seller is going through a divorce and is under pressure to sell quickly and quietly. The seller has not authorized disclosure of this fact. Using this information, the buyer's agent advises the buyer to submit a low offer.
Which statement best characterizes the buyer's agent's duty and conduct?
- The agent breached a fiduciary duty of loyalty owed to the seller because an agent may never exploit a counterparty's personal hardship or family circumstances during negotiations under any recognized theory of agency law
- The agent acted properly: the duty of confidentiality runs to the agent's own principal, and using lawfully obtained information about the other side to advance the client's bargaining position is consistent with loyalty to the buyer
- The agent breached the duty of honest dealing that a licensee owes to all parties, whether or not represented, by silently concealing from the seller and the listing agent that the buyer's side already knew of the pending divorce proceeding
- The agent must promptly disclose the divorce and financial-pressure information to the seller's own listing agent under the general duty of fair and honest disclosure that every real-estate licensee owes to all parties in every transaction
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