When taking a listing, it is appropriate for the broker to:
Audio Lesson
Duration: 2:42
Question & Answer
Review the question and all answer choices
take the listing at whatever price the owner requires without discussion.
Option A is incorrect because brokers have a duty to counsel sellers on appropriate pricing, not simply accept any price without discussion. This abdicates the broker's professional responsibility to provide competent advice.
raise the owner’s asking price to include the commission and an additional amount for negotiation.
Option B is incorrect because artificially inflating the asking price to include commission and negotiation room is unethical and potentially fraudulent. Brokers must not misrepresent property values to benefit themselves.
take a listing at a price that is significantly higher than that suggested by a competitor.
ask questions to determine the seller’s reason for listing.
CORRECT_ANSWER
Why is this correct?
Option C is correct because brokers maintain professional independence and can set their own pricing strategies, including recommending prices higher than competitors, as long as they remain truthful and don't misrepresent facts. This demonstrates the broker's expertise and confidence in their market analysis.
Deep Analysis
AI-powered in-depth explanation of this concept
This question addresses the broker's professional responsibilities when taking a listing, which is a critical aspect of agency relationships in California real estate practice. The core concept involves the broker's duty to provide competent service while adhering to ethical and legal standards. When analyzing the options, we must consider the broker's fiduciary duties, pricing recommendations, and professional obligations. Option A is problematic because brokers have a duty to counsel owners on pricing, not simply accept any price without discussion. Option B violates ethical standards as it artificially inflates the price to include commission and additional negotiation room. Option D represents good practice but isn't the most appropriate action specifically when taking the listing. Option C is correct because brokers can independently determine their business strategies, including pricing recommendations that may differ from competitors, as long as they remain truthful and don't misrepresent facts. This question tests understanding of the broker's professional independence while maintaining ethical obligations.
Knowledge Background
Essential context and foundational knowledge
In California real estate practice, brokers have specific obligations when taking listings. They must exercise reasonable care, competence, and diligence while protecting their client's interests. Brokers have a duty to disclose material facts and must not misrepresent property values or conditions. The California Bureau of Real Estate (BRE) regulations require brokers to provide honest and accurate information. While brokers can independently determine their business strategies, including pricing recommendations, they must remain truthful and not engage in deceptive practices. This balance of professional independence and ethical obligation is fundamental to proper agency relationships in California real estate.
PRICE: Professional, Reasonable, Independent, Competent, Ethical
Remember this acronym when considering pricing decisions. A broker's recommendation should be Professional, Reasonable, show Independent judgment, demonstrate Competence, and always be Ethical.
When questions broker pricing authority, remember brokers can independently recommend prices that differ from others, but must remain truthful and provide competent analysis.
Real World Application
How this concept applies in actual real estate practice
A broker is taking a listing on a property in a competitive neighborhood. The owner has received a competitor's comparative market analysis suggesting a $500,000 asking price. Based on their own analysis of recent sales and current market conditions, the broker believes the property is worth $525,000. The broker explains their reasoning to the owner, provides supporting data, and recommends the higher price. The owner agrees to list at $525,000, demonstrating trust in the broker's expertise. This scenario shows how brokers can independently determine pricing strategies while maintaining ethical obligations by being truthful and providing competent advice.
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