An agent's spouse is interested in purchasing a property that the agent has listed. What steps must the agent take?

Q: What is the correct answer to: An agent's spouse is interested in purchasing a property that the agent has listed. What steps must the agent take?

The correct answer is Disclose the relationship to the seller and obtain written consent before proceeding. Option B is correct because Canadian real estate legislation requires agents to disclose any material conflict of interest that could affect their professional judgment. When an agent's spouse is the potential buyer, this creates a clear conflict between the agent's fiduciary duty to the seller and personal interests. TRESA, RESA, and provincial regulations mandate disclosure of such relationships and require written informed consent from the client before proceeding. This ensures transparency and allows the seller to make an informed decision about continuing with the agent despite the conflict.

Q: What background knowledge is needed for this Agency & Professional Ethics question?

Real estate agents owe fiduciary duties to their clients, including loyalty, disclosure, and acting in the client's best interests. Conflicts of interest arise when an agent's personal interests could compromise their professional judgment. Canadian legislation like TRESA (Ontario), RESA (Alberta), and similar provincial acts require disclosure of material conflicts and obtaining informed written consent. Material conflicts include personal relationships with buyers, financial interests in transactions, or any circumstance that could impair the agent's ability to represent the client's interests objectively. The disclosure must be clear, comprehensive, and made before the conflict situation develops.

Q: What is a good way to remember the answer to this Agency & Professional Ethics question?

Remember DISC: Disclose the conflict, Inform the client fully, Secure written consent, Continue only after consent. Think of a music disc that must be transparent (clear disclosure) to play properly (continue the transaction). When you see any question about conflicts of interest involving family, friends, or personal interests, immediately think DISC. Look for the answer that requires disclosure and written consent rather than automatic avoidance or exemptions.

Q: What exam tip applies to this Agency & Professional Ethics question?

For conflict of interest questions, always choose disclosure plus written consent over exemptions or automatic referrals. Family relationships create conflicts, not exemptions from disclosure rules.

Q: How does this Agency & Professional Ethics concept apply in real world practice?

Agent Sarah has listed a downtown condo for $450,000. Her husband mentions he's interested in buying it as an investment property. Sarah must immediately disclose this relationship to her seller client in writing, explain how it could affect her representation, and obtain written consent before her husband can make an offer. If the seller consents, Sarah can continue representing them, but she must be extra diligent about ensuring the seller receives the best possible terms despite her personal interest in the transaction.

Question

Agency & Professional EthicsConflicts Of InterestMEDIUM

An agent's spouse is interested in purchasing a property that the agent has listed. What steps must the agent take?

Answer Options

A

Complete the transaction normally as family members are exempt from disclosure rules

B

Disclose the relationship to the seller and obtain written consent before proceeding

C

Refer the spouse to another agent to avoid any conflict of interest

D

Reduce the commission to reflect the personal interest in the transaction