Contracts
A real estate agent who includes a clause in a purchase contract that protects only the agent's interests at the expense of their client is:
AActing within their authority as the client's agent
BBreaching their fiduciary duty to the client✓ Correct
CRequired to do so by AREC regulations
DProtected by the terms of the listing agreement
Explanation
An agent has a fiduciary duty to act in the client's best interest. Including contract clauses that benefit the agent at the client's expense is a breach of that duty.
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Key Terms to Know
Fiduciary Duty
The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
State-Specific Concepts
AREC Regulation
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