Avery Ward asks a licensee to show property but never signs a representation agreement and is not treated as a client. In that situation, what is Avery Ward generally called?
Correct Answer
B) Customer
A customer is a person a licensee deals with but does not represent. Avery signed no representation agreement and is not treated as a client, so no agency relationship exists and no fiduciary duties arise. The licensee still owes Avery honesty, fair dealing and disclosure of known material facts about the property, and may show homes and answer factual questions without becoming Avery's agent.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
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.
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