Where the law allows an agent to act for both buyer and seller in the one transaction, what is the most critical requirement?
Correct Answer
B) Informed written consent from both parties after full disclosure of the conflict
Acting for both sides creates an inherent conflict of interest, because the agent cannot advocate fully for either party. Where it is permitted at all, it can proceed only after full disclosure and with both parties' informed written consent. Several states restrict or prohibit it in residential sales, so check your state's rules.
Why This Is the Correct Answer
Dual representation is an inherent conflict. Where it is allowed, the safeguard the law relies on is full disclosure and both parties' informed written consent, so each understands the limits on what the agent can do for them.
Why the Other Options Are Wrong
Deep Analysis of This Agency Practice Question
Background Knowledge for Agency Practice
Memory Technique
Exam Tip for Agency Practice
Real World Application in Agency Practice
Common Mistakes to Avoid on Agency Practice Questions
Related Topics & Key Terms
Key Terms:
More Agency Practice Questions
In NSW, what happens to an agency agreement if the principal dies before the property is sold?
Priya holds an unrestricted class 2 real estate licence and wants to open her own agency as a sole trader. What does the Property and Stock Agents Act 2002 require?
Buyer Ahmed has paid an expression of interest deposit with an offer of $1.2 million (invented). Before exchange, another buyer submits a higher offer. Apart from passing the new offer to the vendor, what must the selling agent do regarding Ahmed?
Under NSW law, what is the standard cooling-off period for a residential property purchase?
In NSW, what is the maximum commission an agent may charge on a residential property sale?
- → An assistant agent completes 5 units of CPP41419 in one CPD year, 2 more than required. What happens to the extra 2 units?
- → A homeowner signs a sole agency agreement, then sells the house to a neighbour she found herself, with no agent involved. Is commission payable under the sole agency?
- → A NSW homeowner signs an exclusive agency agreement to sell her house at 3 pm on a Friday. There is no public holiday that weekend. When does her statutory cooling-off period for the agency agreement end?
- → An agent records the estimated selling price in a NSW residential sales agency agreement as a range with a lower figure of $900,000 (an invented example). What is the highest upper figure the range may lawfully show?
- → A buyer paid an expression of interest deposit on a NSW house, but the vendor then exchanged contracts with a different buyer. What is the first buyer entitled to?
- → Under the certificate of registration pathway, how long must a person hold an assistant real estate agent certificate before becoming eligible for an unrestricted class 2 licence?
- → Since the June 2026 changes to the Property and Stock Agents Act 2002, who can approve standard forms of agency agreement for use in NSW?
- → Under the Property and Stock Agents Act 2002 (NSW), what must a residential sales agency agreement contain for the agent to rely on it?
- → In NSW, if a real estate agent wants to purchase a property they have been engaged to sell, what must they do under the Property and Stock Agents Act?
- → Under NSW legislation, what is the minimum period for which an exclusive agency agreement can be entered into?
People Also Study
Property Law & Legislation
110 questions
Contracts & Conveyancing
106 questions
Property Marketing & Sales
129 questions
Property Management
126 questions
Related Study Resources
Previous Question
In a complex commercial property transaction, an agent receives confidential financial information from the vendor and separately learns that the potential purchaser is facing financial difficulties. How should the agent handle this dual knowledge under fiduciary duty principles?
Next Question
In NSW, an agent does not give the vendor a copy of the signed agency agreement within 48 hours of the vendor signing it. What is the main consequence under the Property and Stock Agents Act 2002?