Question

An Illinois real estate agent, acting as a dual agent, is showing his listing that he knows has had water problems in the basement in the past. The seller has requested that he not divulge this information unless a buyer specifically asks about water. What is the correct action for the agent to take?

a) The listing agent should not say anything per the seller's request because he has an obligation of loyalty to the seller's best interests.
b) The agent should speak up and correct the misinformation because the agent owes the notice of material fact to both the buyer and seller.
c) Do nothing unless the buyer makes an offer.
d) The agent should ask to have the listing agreement nullified and withdrawn.

Answer 1

The correct action for the agent to take is to speak up and correct the misinformation because the agent owes the notice of material fact to both the buyer and seller.

Step-by-step explanation:

Option b) The agent should speak up and correct the misinformation because the agent owes the notice of material fact to both the buyer and seller is the correct action for the agent to take. As a dual agent, the real estate agent has a fiduciary duty to both the buyer and the seller. This means that the agent must act in the best interests of both parties. Failing to disclose known water problems in the past would be a violation of the agent's duty of loyalty to the buyer.

In this situation, it is important for the agent to prioritize the buyer's interests and provide them with accurate information about the property. Even if the seller has requested that this information not be disclosed unless specifically asked, it is the agent's duty to ensure that the buyer is fully informed before making a decision about purchasing the property. By speaking up and correcting the misinformation about the water problems, the agent is fulfilling their obligation to both the buyer and seller.