Salesperson Wendy represents seller client Bob. Buyer Victor contacts Wendy directly, without a buyer's agent, and makes an offer on Bob's property. Wendy provides Victor with the agency disclosure form disclosing that she represents the seller only. Victor signs the form acknowledging he is unrepresented. During negotiations, Victor asks Wendy for advice on whether his offer price is competitive. Wendy provides Victor with detailed negotiating advice that helps Victor lower his offer. Under Massachusetts law, which of the following best describes Wendy's potential liability?
Correct Answer
B) Wendy may have violated her fiduciary duty to seller Bob by providing negotiating advice that benefited Victor at Bob's expense
As Bob's seller's agent, Wendy owes Bob full fiduciary duties, including loyalty and the duty to act in Bob's best interest. By providing Victor with detailed negotiating advice that helped Victor lower his offer, Wendy acted in a manner adverse to her client Bob's financial interests. This is a breach of the fiduciary duty of loyalty owed to the seller. Victor's signed acknowledgment that he is unrepresented does not authorize Wendy to work against her own client's interests. Wendy's conduct could expose her to disciplinary action by the Board and a civil claim by Bob.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A relationship where a listing broker authorizes other brokers to act as agents of the seller, extending the seller's agency relationship to cooperating brokers.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
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