Oregon 30-Hour Real Estate Law Practice Test

Which example illustrates the duty of disclosure?

1. Explaining the closing costs to the buyer.

2. Informing parties about material facts related to the transaction.

3. Providing property history to the buyer.

4. Discussing staging options with the seller.

The correct answer is: Informing parties about material facts related to the transaction.

The duty of disclosure refers to the legal obligation of a real estate agent to inform the parties in a transaction about relevant information that could affect their decisions or the value of the property. This includes revealing material facts that are significant and could impact a buyer's or seller's interests. The choice that exemplifies this duty is the act of informing parties about material facts related to the transaction. This encompasses things such as previous damage to the property, pending litigations, or any other information that could pose risks or affect the desirability of the property. Such disclosures are crucial in maintaining transparency and integrity within real estate dealings. Other options, while relevant to real estate transactions, do not specifically represent the duty of disclosure. For instance, explaining closing costs and discussing staging options involve providing helpful information but do not necessarily encompass material disclosures about the property's condition or legal obligations. Providing property history can be important, but it may not always relate to critical facts that influence the transaction in the same way as disclosing material facts does.