NAR Client Relationship & Account Management 3 — Questions and Answers
Question 1: A client instructs their agent to present only offers above a certain price. The agent receives a lower offer that otherwise has very favorable terms. What should the agent do?
- Discard the offer per the client's instructions
- Present the offer and explain its favorable terms, then let the client decide (Correct answer)
- Counter the offer without telling the client
- Submit the offer only if the buyer raises the price
Correct answer: Present the offer and explain its favorable terms, then let the client decide
Agents must present all offers promptly unless the client has given a written, specific instruction to the contrary that complies with law.
Question 2: Which scenario represents a breach of the duty of confidentiality?
- Telling a buyer the seller's asking price is firm
- Disclosing to another party that the seller is under financial pressure to sell quickly (Correct answer)
- Advising the buyer on neighborhood school ratings
- Confirming that the property is in a flood zone
Correct answer: Disclosing to another party that the seller is under financial pressure to sell quickly
Revealing a client's motivation or financial situation to the opposing party breaches the agent's duty of confidentiality.
Question 3: What is the primary purpose of a Comparative Market Analysis (CMA) when working with a seller client?
- To set the property's assessed tax value
- To estimate a competitive listing price based on recent comparable sales (Correct answer)
- To determine the cost of repairs needed before listing
- To calculate the agent's commission
Correct answer: To estimate a competitive listing price based on recent comparable sales
A CMA uses recent sales of similar properties to help establish a realistic and competitive listing price.
Question 4: Under the NAR Code of Ethics, when must a REALTOR® disclose their status as a real estate licensee when purchasing property for themselves?
- Only when asked by the seller
- Before or at the time of making an offer (Correct answer)
- After the offer is accepted
- Only in commercial transactions
Correct answer: Before or at the time of making an offer
Article 4 of the NAR Code of Ethics requires REALTORS® to disclose their licensee status when buying, selling, or renting property for their own account.
Question 5: A buyer's agent discovers during a showing that the property has an unpermitted addition. What is the appropriate action?
- Say nothing to avoid jeopardizing the deal
- Disclose the issue to the buyer client so they can make an informed decision (Correct answer)
- Report it only to the listing agent
- Wait until after the inspection period
Correct answer: Disclose the issue to the buyer client so they can make an informed decision
The agent's duty to disclose material facts requires informing the buyer client of the unpermitted addition promptly.
Question 6: What does the term 'obedience' mean in the context of fiduciary duties to a client?
- Following all client wishes regardless of legality or ethics
- Following lawful client instructions even if the agent disagrees with the strategy (Correct answer)
- Obeying the MLS rules above client instructions
- Complying with NAR policies exclusively
Correct answer: Following lawful client instructions even if the agent disagrees with the strategy
Obedience requires agents to follow lawful and ethical client instructions, but not instructions that are illegal or unethical.
Question 7: An agent represents a buyer who is also the agent's family member. What is the recommended best practice?
- No disclosure is needed since it is a personal relationship
- Disclose the personal relationship in writing and confirm the client still wants representation (Correct answer)
- Refer the family member to another agent automatically
- Charge a reduced commission without disclosure
Correct answer: Disclose the personal relationship in writing and confirm the client still wants representation
Disclosing personal relationships that could influence the agency relationship ensures transparency and protects all parties.
NAR Client Relationship & Account Management 3
A client instructs their agent to present only offers above a certain price.
The agent receives a lower offer that otherwise has very favorable terms.
What should the agent do?