A California real estate broker receives two offers simultaneously on a property listed in Stockton for $550,000. Offer A is for $540,000 and Offer B is for $555,000. The seller's agent presents only Offer B to the seller, who accepts it. If the buyer from Offer A later discovers this, what violation has the seller's agent committed under California law?
Correct Answer
D) A violation of the agent's fiduciary duty because California law requires all offers to be presented to the seller
A listing agent owes the seller a fiduciary duty of utmost care, integrity, honesty, and loyalty, the duty described in the statutory agency disclosure at Civil Code section 2079.16. That duty requires the agent to deliver every written offer to the seller, because the choice among offers belongs to the principal and screening one out substitutes the agent's judgment for the seller's. A seller may direct the agent differently, but the instruction has to come from the seller and be documented, and nothing in these facts shows one. Withholding the $540,000 offer is a breach of that duty and grounds for Department of Real Estate discipline.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
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Specific performance in North Dakota:
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