Agency
Indiana's rule that an agent may not purchase property listed with them applies because:
AAgents are legally barred from owning real estate
BSuch a transaction creates a conflict of interest — the agent has superior market knowledge and owes duties to the seller that could be compromised✓ Correct
CThe agent's license must be inactive for such a purchase
DRESPA prohibits agents from purchasing their own listings
Explanation
When a listing agent wishes to purchase their own listing, there is an inherent conflict of interest. The agent must fully disclose their interest, the potential conflict, and obtain written consent from the seller — or withdraw from the listing.
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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.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Seller's Agent (Listing Agent)A real estate licensee who represents the seller's interests, markets the property, and owes fiduciary duties to the seller.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
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