Maine Real Estate License Practice Exam

What must a realtor do when they discover a material defect in a property they are listing?

1. Amend the property disclosure form

2. Wait until the buyer conducts a home inspection

3. Immediately terminate the listing

4. Maintain seller client confidentiality

The correct answer is: Amend the property disclosure form

When a realtor discovers a material defect in a property they are listing, the obligation is to ensure that this information is disclosed properly, which includes amending the property disclosure form. Material defects are significant issues that affect the value or safety of a property, such as structural problems or hazardous conditions. According to industry standards and ethical guidelines, realtors have a duty to inform all potential buyers about these defects, which helps protect both the buyer's interests and the integrity of the transaction. By amending the property disclosure form, the realtor ensures that the information is formally recorded and accessible to prospective buyers, promoting transparency in the real estate process. Other options do not address the necessity of disclosure directly. Waiting for a buyer to conduct a home inspection does not relieve the realtor of the responsibility to disclose known issues upfront. Terminating the listing is an extreme action that isn’t generally required unless circumstances dictate otherwise. While maintaining seller client confidentiality is important, it does not override the duty to disclose material defects, as this information is crucial for protecting buyers and ensuring fair dealings in real estate transactions.