Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What type of information is a licensee not required to disclose to third parties?

1. Non-material facts

2. Material facts

3. Confidential facts

4. Financial facts

The correct answer is: Non-material facts

A licensee is not required to disclose non-material facts to third parties because these facts do not significantly affect the value of the property or a reasonable buyer's decision to purchase the property. Non-material facts typically relate to the property but lack importance in influencing the sale. For instance, a minor cosmetic defect that does not affect the property's overall value or livability may be considered a non-material fact. Thus, while a licensee must report material facts, such as issues with the roof or foundation that could impact the property's value, or confidential facts regarding a client's financial situation or motivations, non-material facts do not carry the same obligation to disclose. Confidential facts are information shared in trust which could harm the client’s position if disclosed, such as a seller's motivation to sell urgently. Material facts would include any significant issues affecting the property's value or desirability. Financial facts involve the financial condition of the parties involved, which may also require confidentiality. Hence, non-material facts are the type of information a licensee is not obligated to disclose.