Question 12

In a disclosed dual agency relationship, the agent is NOT permitted to negotiate in the best interest of either party.

In a disclosed dual agency relationship, the agent cannot advocate for the interests of one party over the other, which includes negotiating in the best interest of either party.

A) negotiate in the best interest of either party

This option is correct because, in a dual agency situation, the agent has a fiduciary duty to both parties, which prohibits them from favoring one party's interests over the other. Negotiating in the best interest of either party would create a conflict of interest, undermining the neutrality required in dual agency.

B) keep confidential information on both sides

This option is incorrect because, while an agent in a dual agency must disclose relevant information to both parties, they are still allowed to keep confidential information. However, they must be careful not to disclose any confidential information without consent, which keeps the balance in the relationship.

C) disclose material defects

This option is incorrect as agents are required to disclose material defects regardless of whether they are acting in a dual agency capacity. This duty to disclose ensures that both parties are aware of any significant issues that could affect their decision-making.

D) present counter offers

This option is incorrect because an agent in a dual agency can present counter offers, provided they do so without bias towards one party. Presenting counter offers is a standard part of negotiation and does not inherently violate the principles of dual agency.

Conclusion

The correct answer emphasizes the inherent conflict of interest in a disclosed dual agency relationship, where the agent must remain neutral and cannot negotiate in favor of one party. All other options either reflect duties and responsibilities that agents maintain or are misrepresentations of the agent's role in dual agency situations.