Sales Practices & Ethical Standards Flashcards

A developer's sales agent is approached by a buyer who is also working with an outside buyer's agent. The developer's agent should:

Answer: Respect the buyer's representation and work cooperatively with the buyer's agent

Attempting to interfere with an established agency relationship or inducing a client to break their agreement is an ethical violation; agents must cooperate with the buyer's representative.

Which of the following best describes the concept of 'informed consent' in dual agency situations during a condominium sale?

Answer: Both the buyer and seller sign a written disclosure acknowledging and agreeing to dual agency before it begins

Informed consent to dual agency requires written disclosure and agreement from both buyer and seller before the dual agency relationship commences.

A condominium sales agent receives an earnest money deposit but deposits it into their personal bank account for one week before transferring it to the broker's escrow account. This is an example of:

Answer: Commingling, which is an ethical and legal violation

Commingling occurs when an agent mixes client funds with personal funds, which is prohibited by law and professional ethics regardless of intent or timing.

Under ethical sales standards for condominiums, what is an agent's responsibility when they suspect a seller is pricing a unit with the intent to discriminate against certain buyers?

Answer: Counsel the seller on fair housing obligations and refuse to participate in discriminatory pricing

Agents must counsel sellers about fair housing obligations and cannot knowingly participate in discriminatory practices, including discriminatory pricing strategies.

A CCS agent receives a verbal offer well below the asking price. The seller says 'Don't even bother presenting lowball offers.' The agent's obligation is to:

Answer: Document the seller's instruction and still present all offers in writing

Agents must present all written offers to the seller; if the seller provides advance written instructions about minimum prices, the agent should document this policy and still present offers that meet any stated criteria—but verbal offers must be reduced to writing first.

What is the ethical significance of the 'as-is' clause in a condominium purchase contract from the agent's perspective?

Answer: It transfers physical condition risk to the buyer but does not relieve the agent of disclosure obligations

An 'as-is' clause addresses the buyer's right to demand repairs but does not eliminate the agent's or seller's obligation to disclose known material defects.

A CCS-designated agent is asked by a client to write a purchase offer that misrepresents the buyer's intended use of a condominium unit (e.g., claiming owner-occupancy when the buyer plans to rent). The agent should:

Answer: Refuse to participate in misrepresentation and explain the legal risks to the client

An agent must refuse to draft a fraudulent offer because misrepresenting occupancy intent can constitute mortgage fraud, exposing both the client and agent to serious legal consequences.