A California listing agent wishes to purchase the property they are currently representing as the seller's agent. Under California law, what must the agent do before proceeding with the purchase?
Correct Answer
A) Disclose their licensed status and intent to purchase in writing, and obtain the seller's informed written consent before completing the transaction
An agent who buys the property they are listing is self-dealing, and the fiduciary duties of loyalty and full disclosure require the agent to put the conflict in front of the principal in writing and obtain the principal's informed written consent. Business and Professions Code Section 10176 backs this with discipline: subdivision (g) reaches the taking of any secret or undisclosed compensation or profit, and subdivision (h) reaches a licensee who holds an option to purchase under a listing without revealing in writing the full amount of the licensee's profit. The agent must also disclose the material information about the property and the market that they learned while working for the seller.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
More Laws Of Agency Fiduciary Duties Questions
Under California law, the agency disclosure requirements apply to which types of property?
Under California law, when must a buyer's agent give the agency disclosure form to the buyer?
A broker who fails to promptly disclose their dual agency status is subject to:
A broker’s fiduciary obligation to protect a seller’s confidential information continues:
A broker has an exclusive agency listing on a property. If the owner sells the property, the broker is entitled to:
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Under California law, the duty of confidentiality requires a listing agent to keep all of the following information about the seller confidential EXCEPT:
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