Agency
In which scenario is an agent MOST likely to have a conflict of interest?
ARepresenting a buyer in a neighborhood where the agent owns no property
BActing as a dual agent representing both buyer and seller in the same transaction✓ Correct
CShowing a listing to buyers referred by another agent
DPlacing a listing on the MLS
Explanation
Dual agency creates the most significant conflict of interest because the agent owes fiduciary duties of loyalty to both the buyer and seller simultaneously, which are inherently conflicting obligations.
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Key Terms to Know
Capitalization Rate (Cap Rate)
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Math Concepts
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