A listing agent receives an earnest money check and, without telling the seller, deposits it into a personal savings account to earn interest before transferring it. What undisclosed financial benefit has the agent gained?
Correct Answer
A) Secret profit
Secret profit is correct because the agent earned undisclosed interest income by placing the client's money in a personal account, an undisclosed benefit that violates the duty of loyalty.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
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A listing agreement creates an agency relationship between:
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Previous Question
Without telling the seller, the listing agent buys the property through a family member to capture a bargain for personal benefit. What misconduct does this most clearly show?
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A broker secretly represents both sides of the same sale but tells each party that only one client is being represented. What is this violation called?