Final answer:
The agent's disclosure of the seller's willingness to settle for a lower price reflects a breach of professional conduct and illustrates the issue of imperfect information in real estate transactions. The lack of complete knowledge affecting price negotiations is exemplified by Freda's home value increase and other cases where equity changes with market value and loan repayments.
Step-by-step explanation:
In the scenario where a principal discloses a willingness to sell property for $150,000, but it is marketed at $180,000 without offers, and later, an agent expresses to a customer that the seller would have settled for less, it is a matter of real estate ethics and information asymmetry.
The agent's remark after the listing period could be considered unprofessional as it breaches the confidentiality of the seller's minimum selling price. The truthfulness about property advertisement and price negotiation is often complicated in real estate due to imperfect information.
Imperfect information makes it difficult for buyers and sellers to agree on a price because neither has complete knowledge about the property's condition, the market, or the lowest price the other party is willing to accept. Prices of houses and used cars often reflect the limited truths disclosed by the sellers, such as issues with the property or vehicle.
Examples include Freda's house, which has increased in value and would sell for $250,000 regardless of her purchase price, or Ben's and Frank's situations where their properties' values have appreciated while the bank loans have decreased, leading to increased equity.