Agency
Under Illinois law, a licensee who is working as a buyer's agent and also receives compensation from the seller's side without disclosure is engaging in:
ALegitimate dual compensation that benefits all parties
BUndisclosed dual compensation, which creates a conflict of interest and violates the duty of loyalty to the buyer✓ Correct
CA permitted practice as long as the total commission is under 6%
DA standard transactional brokerage arrangement
Explanation
Undisclosed dual compensation is a serious breach of fiduciary duty. If a buyer's agent receives any undisclosed payment or benefit from the seller (or their agent), they have a conflict of interest that may not allow them to fully represent the buyer's best interests.
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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.
Buyer's AgentA real estate licensee who represents the buyer's interests in a transaction, owing fiduciary duties to the buyer.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Math Concepts
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