Agency
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 provisions✓ Correct
CProviding excellent service to clients
DOnly required to disclose if the inspector's fee is above average
Explanation
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.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
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