Agency relationships, fiduciary duties, and disclosure requirements tested on state real estate licensing exams.
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- What is the primary relationship created when a real estate agent agrees to represent a buyer or seller?
- An agency relationship, where the agent acts as a fiduciary on behalf of the principal.
- Define a fiduciary duty in real estate.
- A legal obligation to act in the best interest of the principal, with loyalty, honesty, and care.
- What are the four core fiduciary duties of a real estate agent?
- Care, loyalty, obedience, and disclosure.
- What does the duty of care require of a real estate agent?
- To act with the skill, knowledge, and diligence expected of a professional in the real estate industry.
- What does the duty of loyalty require of a real estate agent?
- To put the principal's interests above all others, including the agent's own financial interests.
- What does the duty of obedience require of a real estate agent?
- To follow the lawful instructions of the principal and comply with the terms of the agency agreement.
- What does the duty of disclosure require of a real estate agent?
- To inform the principal of all material facts that could affect decisions, including offers, buyer information, and property defects.
- What information must be disclosed to a buyer about a property?
- All known material defects, environmental hazards, previous damage, property condition, and any facts affecting value or desirability.
- What is an agent's duty of confidentiality?
- To keep the principal's private information confidential, even after the agency relationship ends, except where disclosure is required by law.
- When does an agent's duty of confidentiality end?
- Generally upon termination of the agency relationship, but duties may extend indefinitely for certain sensitive information depending on state law.
- What must an agent disclose about a property defect the agent is aware of?
- The agent must disclose the defect to all parties the agent represents, regardless of whether the principal asks.
- What is dual agency in real estate?
- When one agent or broker represents both the buyer and the seller in the same transaction.
- What consent is required for dual agency?
- Informed written consent from both the buyer and seller, with full disclosure of the conflict.
- What is single agency?
- When an agent or broker represents only one party (buyer or seller) in a transaction.
- What is an exclusive buyer agency agreement?
- A written contract where a buyer agent agrees to represent only that buyer and the buyer agrees not to work with other agents.