Agency
Under North Dakota law, when is a buyer considered a 'customer' rather than a 'client' of a real estate agent?
AWhen the buyer pays cash for a property
BWhen the buyer does not have a buyer's broker agreement; the agent owes them honesty but not full fiduciary duties✓ Correct
CWhen the buyer is purchasing commercial property
DAlways; buyers are always customers
Explanation
A 'customer' is a party receiving limited ministerial services from a licensee without an agency agreement. A 'client' has an agency agreement entitling them to full fiduciary services.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
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.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
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