Agency
A Massachusetts buyer's agent negotiates a purchase price $30,000 below asking price. The agent's commission is a percentage of the sale price. The agent has a possible conflict of interest because:
AThe agent wants to earn the highest possible commission by obtaining the highest price
BA lower sale price means a lower commission, potentially conflicting with the duty to get the buyer the best price✓ Correct
CAgents always benefit from lower sale prices
DThere is no conflict because buyers' agents are always paid by the seller
Explanation
When a buyer's agent is paid a percentage of the sale price, a lower sale price (which benefits the buyer) results in a lower commission for the agent. This creates a potential conflict between the agent's financial interest and the duty of loyalty to the buyer.
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