Robert, a licensed Arkansas broker-associate, represents both the buyer and the seller in a transaction in Fort Smith after both parties signed a written consent to dual agency. The buyer submits an offer at $250,000. The seller verbally tells Robert he will accept $255,000 but not the buyer's price. Robert, believing he can bridge the gap, tells the buyer 'the seller is considering your offer carefully.' Without disclosing the seller's actual bottom line, Robert encourages the buyer to increase the offer voluntarily. The buyer raises the offer to $257,000 and the seller accepts. Which statement best describes Robert's conduct under AREC rules?
Correct Answer
B) Robert violated AREC rules by making a misleading statement to the buyer that misrepresented the seller's actual position
Even in a dual agency relationship, AREC rules prohibit a licensee from making false or misleading statements to either party. Robert's statement that 'the seller is considering your offer carefully' was misleading because the seller had already clearly rejected the offer price and stated a specific minimum. While a dual agent may withhold confidential negotiating motivations, Robert's affirmative misrepresentation of the seller's position—implying openness when rejection had occurred—violates the honesty obligations owed to all parties under AREC rules.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
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