A vendor wants to set a reserve price below the advertised price range for an auction. What should the agent do?
Correct Answer
C) Explain the rules on price guides and reserves, then act on the vendor's lawful decision
Agents must ensure compliance with advertising and auction conduct laws, which typically require price guides to reflect genuine selling expectations. The agent should advise the vendor about legal requirements while respecting their ultimate decision-making authority.
Why This Is the Correct Answer
The reserve is the vendor's decision, but the agent must make sure the vendor understands the price-guide and underquoting rules that govern how the property is advertised. Advising first, then acting on a lawful decision, meets both duties.
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A vendor instructs their agent not to accept offers below $800,000. The agent receives an offer for $750,000. What should the agent do?
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