Who holds liability in a real estate transaction if material facts are undisclosed?

In a real estate transaction, if material facts are undisclosed, both the seller and the broker typically hold liability. The seller has an obligation to disclose known material defects and issues related to the property, ensuring that the buyer has all necessary information for making an informed decision. This duty arises from the seller's responsibility for the condition of the property and the potential impact on its value or desirability.

The broker, as a representative of the seller and facilitator of the transaction, shares in this duty. Brokers are expected to conduct due diligence and encourage their clients to disclose relevant information. If a material fact is undisclosed and causes harm or loss to the buyer, the broker can be held accountable for failing to uphold their fiduciary duty, which includes acting in the best interest of their clients and the integrity of the transaction.

Thus, the correct answer identifies the dual liability between the seller and the broker, as both play critical roles in the transaction and are responsible for ensuring that all material facts are disclosed to potential buyers.