Idaho Real Estate Practice Exam

Which action is prohibited when in a dual agency situation?

1. Advising both parties

2. Disclosing both parties' confidential information

3. Negotiating terms

4. Facilitating communication

The correct answer is: Disclosing both parties' confidential information

In a dual agency situation, the primary principle to adhere to is the obligation of confidentiality toward both parties involved. Disclosing either party's confidential information is considered a violation of this principle, as the agent has a legal and ethical duty to keep such information private. The agent must navigate the conflicting interests of both clients carefully while ensuring that sensitive information does not get shared between them, which could compromise either party's negotiating position. While advising both parties is allowed as long as it is done impartially, negotiating terms should be approached with caution to avoid favoring one party over the other. Facilitating communication is also permissible but should be managed in a way that maintains the confidentiality of each party's interests. Thus, it is crucial to maintain the trust vested in the agent by not revealing any confidential details to the other party.