Real Estate Sales Agency and Fiduciary Duties Questions and Answers Flashcards

A buyer's agent learns that the seller is willing to accept a lower price than listed. What is the agent's fiduciary obligation?

Answer: Keep this information confidential

A buyer's agent owes confidentiality to their client and must not disclose the seller's motivation or willingness to accept less without authorization.

Which type of agency relationship is created when a broker represents both the buyer and the seller in the same transaction?

Answer: Dual agency

Dual agency occurs when one broker or firm represents both parties in a transaction, requiring informed written consent from both sides.

An agent who fails to present all offers to a seller has violated which fiduciary duty?

Answer: Disclosure

The duty of disclosure requires agents to present all material facts and offers to their clients, regardless of the agent's opinion of the offer.

A listing agent discovers that the property has a hidden foundation crack during an open house. What must the agent do?

Answer: Disclose the defect to all prospective buyers

Material defects that affect property value or safety must be disclosed to all prospective buyers regardless of the seller's wishes.

In a designated agency arrangement, which statement is TRUE?

Answer: Each designated agent represents only their assigned client's interests

In designated agency, the broker assigns individual agents to represent each party separately, and each agent advocates solely for their assigned client.

Which fiduciary duty requires an agent to follow the lawful instructions of their client?

Answer: Obedience

The duty of obedience obligates an agent to carry out all lawful instructions given by the client in the scope of the agency agreement.