Question

A seller tells his agent that he has to sell his house quickly because of a divorce proceeding and that he's willing to accept less than his list price. His agent tells a buyer that the seller will accept as much as $10,000 less than the list price. Which of these is true?

a. The agent has breached his duty of confidentiality to his client.
b. The agent hasn't violated any fiduciary responsibilities to his client.
c. The buyer is prohibited from making an offer because of the agent's breach of confidentiality.
d. Unless the agent has the seller's permission to share this information, the agent should have disclosed only that the seller is willing to reduce his price, not the amount.

Answer 1

The agent has breached his duty of confidentiality by disclosing that the seller would accept $10,000 less than the list price without permission, which can undermine the seller's position.

Step-by-step explanation:

In the scenario where an agent reveals that a seller is willing to accept $10,000 less than the list price without the seller's permission, the agent has breached his duty of confidentiality to his client. The duty of confidentiality is a component of the fiduciary responsibilities an agent owes to their client, which includes keeping sensitive information private unless the client authorizes disclosure.

While it is permissible for an agent to convey that a seller may be willing to consider offers below the listing price, specifying the amount without the seller's consent is improper and can undermine the seller's negotiating position.

If the agent did not have explicit permission to disclose the amount by which the seller is willing to reduce the price, then option d is correct: the agent should have only disclosed that the seller is willing to negotiate on price, not the specific amount.