Three buyers are in a multi-offer process. Shortly before the deadline two withdraw, leaving one buyer who put in a strong offer believing she faced competition. What does REA's guidance say the salesperson should do?
Correct Answer
D) Tell the remaining buyer, in case she wants to review her offer before it is presented.
REA's multi-offer guidance says that if a buyer pulls out leaving one interested buyer, that buyer should be informed in case they want to review their offer before it is presented. This reflects rule 6.2 (good faith and fair dealing with all parties) and rule 9.2 (no undue or unfair pressure on customers).
Why This Is the Correct Answer
REA says the sole remaining buyer should be informed so she can review her offer.
Why the Other Options Are Wrong
Option A: Say nothing, because telling her would breach the salesperson's fiduciary duty to the vendor.
REA's guidance says the remaining buyer should be informed, consistent with dealing fairly under rule 6.2.
Option B: Present her offer at once without comment, as the withdrawal changes nothing for her.
REA says she should be told she is now the only party, so she can decide whether to review her offer.
Option C: Tell her only if the vendor gives written instructions allowing the salesperson to do so.
REA's guidance does not make this depend on vendor permission; fairness to the buyer requires it.
Background Knowledge for Agency Practice
Source: https://www.rea.govt.nz/real-estate-professionals/industry-guidance-and-information/the-sales-process-and-general-guidance/multi-offers/
Exam Tip for Agency Practice
When competition disappears, tell the remaining buyer.
Common Mistakes to Avoid on Agency Practice Questions
- •Keeping quiet to hold a buyer to an inflated price she offered against rivals who have gone.
More Agency Practice Questions
A real estate agent receives two offers on a property at the same time. What is their primary obligation?
Which of the following situations would create a conflict of interest requiring disclosure by a real estate licensee?
Sarah is a licensed salesperson working for ABC Real Estate. When showing a property to buyers, who does she primarily represent?
Under the Real Estate Agents Act 2008, what is the primary duty that a real estate agent owes to their client?
Which licence allows a person to carry out real estate agency work for an agent, but only under supervision?
- → Under section 126 of the Real Estate Agents Act 2008, what must happen after the client signs an agency agreement for the agent to be entitled to commission?
- → A licensed agent discovers that their salesperson has been providing advice about tax implications of a property investment without appropriate qualifications. What is the agent's responsibility?
- → An agency agreement contains a clause stating that the agent's commission is payable even if the property is sold by the vendor directly to a buyer introduced by the agent during the agency period, but the sale settles after the agency expires. Is this clause enforceable?
- → What must a real estate agent disclose to a potential purchaser when showing a property?
- → Under a sole agency agreement, when is the vendor still liable to pay commission to the agent?
- → Sarah holds a salesperson's licence and works for ABC Real Estate. When presenting an offer to a vendor, who is legally responsible for ensuring all disclosure obligations are met?
- → A real estate agent discovers that a property has a leaky roof after the agency agreement is signed but before any offers are received. What is the agent's obligation?
- → Which of the following allows an agent to end an agency agreement before its expiry date?
- → Under the Real Estate Agents Act 2008, what is the primary fiduciary duty that a real estate agent owes to their client?
- → What must a licensee do when they become aware of a material defect in a property they are marketing?
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