AgencyIntermediateAlaska Exam

An Alaska real estate agent who consistently recommends a specific home inspector to all clients without disclosing that they receive a referral fee for each recommendation is:

AFollowing acceptable industry practice
BViolating the duty of full disclosure and potentially RESPA's anti-kickback provisionsCorrect
CProviding excellent service to clients
DOnly required to disclose if the inspector's fee is above average, under standard practice

Why Violating the duty of full disclosure and potentially RESPA's anti-kickback provisions Is Correct

Answer B: Violating the duty of full disclosure and potentially RESPA's anti-kickback provisions

Accepting referral fees from service providers while making recommendations to clients without disclosing those fees violates the agent's duty of full disclosure. If federally related mortgage transactions are involved, it may also violate RESPA's prohibition on kickbacks for settlement service referrals.

Exam Tip: Agency

Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.

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