An agent is paid a monthly consulting fee by a developer who wants to buy a particular block cheaply. The owner of that block asks the agent to sell it. What should the agent do?
Correct Answer
D) Decline the appointment, because her interests conflict with the owner's interests.
Rule 11 of Schedule 1 says an agent must not accept an appointment, or continue to act, if doing so places the agent's interests in conflict with a client's interests. Fair Trading's summary adds that agents must not enter commercial arrangements that put their interests before their clients'.
Why This Is the Correct Answer
A paid relationship with a buyer seeking a low price conflicts with the vendor's interest in a high price, so rule 11 bars the appointment.
Why the Other Options Are Wrong
Background Knowledge for Ethics Compliance
Exam Tip for Ethics Compliance
Common Mistakes to Avoid on Ethics Compliance Questions
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- → An agent tells an elderly owner she must sign an agency agreement tonight or lose every buyer, then phones her repeatedly after 10 pm when she hesitates. Which Schedule 1 rule is most clearly breached?
- → An agent hands a buyer the agency’s expression of interest statement form to sign before accepting her deposit. When must the agent give the buyer a copy of the signed statement?
- → An assistant agent's sister wants to buy a house that the assistant's employing agency has been retained to sell. How does s 49 of the Property and Stock Agents Act 2002 apply?
- → As at October 2026, what is the maximum court penalty for a corporation convicted of dummy bidding at a NSW residential auction?
- → As at October 2026, an individual NSW agent holds client deposits in her personal account instead of the trust account. What maximum court penalty applies to her for mishandling trust money?
- → As at October 2026, what new maximum court penalty applies to a NSW agent or assistant agent who does not meet the continuing professional development requirements?
- → In New South Wales, what must an agent give a client before the client signs an agency agreement for the sale of residential property?
- → A vendor has instructed her agent in writing not to pass on any offers below $850,000 (invented). Before exchange, a buyer makes a genuine written offer of $800,000. What does NSW law require of the agent?
- → At an open home, a buyer asks the selling agent whether the roof was replaced when the house was renovated. The agent does not know. What is the appropriate response?
- → A buyer asks the agent selling a house to also act as her buyer's agent for that same house, for a separate fee. What does the Property and Stock Agents Act 2002 say?
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An agent hands a buyer the agency’s expression of interest statement form to sign before accepting her deposit. When must the agent give the buyer a copy of the signed statement?
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An agent recommends a home stylist to a vendor, calling the stylist 'completely independent'. The stylist pays the agent 10% of every fee she earns from referred clients. What does Schedule 1 require?