What is the consequence of an agent failing to disclose known defects in a property?

Failure to disclose known defects in a property can lead to significant legal repercussions for an agent. Real estate agents have a fiduciary duty to their clients, which includes the obligation to provide full disclosure of any material facts that could affect a buyer's decision. When defects are not disclosed, it can lead to claims of fraud, misrepresentation, or a breach of duty. This could result in lawsuits, financial penalties, or disciplinary actions from regulatory bodies, jeopardizing the agent's license and reputation.

In contrast, considering the other options, the idea that the agent's actions are always ethical is inaccurate; ethics in real estate are contingent upon adherence to legal and professional standards. The transaction being automatically invalidated does not occur simply due to non-disclosure; it typically requires legal action for such a determination. Lastly, stating that there would be no impact on the transaction undermines the serious implications of undisclosed defects, especially if it affects the value or safety of the property. Therefore, acknowledging the legal responsibilities emphasizes the importance of transparency in real estate dealings.