Client confidences: motivation, deadlines, price flexibility — NEVER disclose
Before you read
Test yourself first: 5 questions
Question 1 of 5
A buyer's agent learns the seller filed for divorce and must sell within 30 days. The agent's duty is to:
Answer: B. Fiduciary DISCLOSURE runs to the CLIENT: material information the agent learns — including the other party's motivation — must be shared with, and may be used for, the buyer. The agent owes the seller only honesty, not confidentiality.
Question 2 of 5
At an open house, an unrepresented visitor tells the listing agent, 'We'd go to $520,000 if we had to.' The visitor later offers $495,000 through their own agent. The listing agent should:
Answer: B. The visitor is a CUSTOMER; the seller is the CLIENT. Material information voluntarily revealed by a customer — like willingness to pay more — must be passed to the client under the duty of disclosure. Confidentiality protects clients, not customers.
Question 3 of 5
A seller's disclosure says the basement 'has never leaked.' The listing agent saw water stains and a dehumidifier during the walkthrough. The agent should:
Answer: B. Agents must disclose material facts they OBSERVE, even when they contradict the seller. Concealment (or staging away evidence) is fraud. Disclose, recommend an expert, document.
Question 4 of 5
A 'material fact' that must be disclosed is one that:
Answer: A. Material facts are those a reasonable buyer would consider important to the decision or value — known defects, hazards, and similar must be disclosed.
Question 5 of 5
Visible mold from a known, unrepaired roof leak is:
Answer: A. Known mold/water-intrusion problems are material facts affecting value and health, so they must be disclosed even in an as-is sale.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Material fact: affects value or desirability — MUST disclose (defects, boundary issues)
- Client confidences: motivation, deadlines, price flexibility — NEVER disclose
- The line: facts about the PROPERTY are material; facts about the CLIENT are confidential
- Confidentiality survives the transaction forever
- Ordered to hide a defect? Refuse — obedience covers only LAWFUL instructions
Material Fact or Confidential?: FAQs
Is Material Fact or Confidential? on the real estate exam?
Yes. Disclosures & Environmental is a scored domain on the real estate licensing exam, and this topic appears in the national portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
