Michigan-licensed salesperson Elena represents buyer David Park in purchasing a home in Troy. After the purchase agreement is signed, David tells Elena that he has changed his mind and wants to back out of the deal. Elena believes the property is a great investment and encourages David to stay in the contract against his wishes. Which fiduciary duty is Elena most clearly violating?
Correct Answer
C) Loyalty
Elena is violating the duty of loyalty by placing her own judgment and interests (believing the property is a good investment) above David's expressed wishes. Loyalty requires the agent to act solely in the client's best interest, which includes respecting the client's decision to withdraw from a transaction even if the agent disagrees. Elena should inform David of any legal consequences of withdrawal but ultimately must support his decision.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An agency relationship created by a clear, explicit agreement between the principal and agent, either orally or in writing.
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