AgencyIntermediateCalifornia Exam

A buyer's agent who also represents another buyer interested in the same property creates:

ASingle agency with both buyers, per standard fiduciary practice in the industry

BA conflict of interest requiring disclosure to both buyersCorrect

CA valid dual agency, under standard California agency practice

DNo ethical issue if buyers are unrelated, as commonly applied in brokerage relationships

Why A conflict of interest requiring disclosure to both buyers Is Correct

Answer B: A conflict of interest requiring disclosure to both buyers

Representing competing buyers for the same property creates a conflict of interest. The agent has conflicting fiduciary duties and must disclose the conflict to both clients.

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.

Key Agency Terms in This Question

Agency

A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.

Dual Agency

A situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.

Buyer's Agent

A real estate licensee who represents the buyer's interests in a transaction, owing fiduciary duties to the buyer.

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.

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