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?
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An agency relationship, where the agent acts as a fiduciary on behalf of the principal.- Define a fiduciary duty in real estate.
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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?
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Care, loyalty, obedience, and disclosure.- What does the duty of care require of a real estate agent?
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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?
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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?
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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?
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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?
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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?
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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?
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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?
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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?
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When one agent or broker represents both the buyer and the seller in the same transaction.- What consent is required for dual agency?
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Informed written consent from both the buyer and seller, with full disclosure of the conflict.- What is single agency?
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When an agent or broker represents only one party (buyer or seller) in a transaction.- What is an exclusive buyer agency agreement?
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A written contract where a buyer agent agrees to represent only that buyer and the buyer agrees not to work with other agents.
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