Agency
Under Rhode Island law, a buyer's agent may accept compensation from the seller (or seller's broker) through the cooperative compensation structure. Is this a conflict of interest?
AYes, the buyer's agent must always be paid only by the buyer
BNo, as long as the compensation arrangement is disclosed to the buyer and does not compromise the agent's loyalty to the buyer✓ Correct
CYes, and it makes the buyer's agent a dual agent automatically
DNo, and no disclosure is required
Explanation
It is common for a buyer's agent to receive compensation through the seller's cooperative commission. This is not automatically a conflict of interest as long as it is disclosed to the buyer and the agent maintains their fiduciary duties to the buyer.
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Key Terms to Know
Buyer's Agent
A real estate licensee who represents the buyer's interests in a transaction, owing fiduciary duties to the buyer.
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.
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.
Math Concepts
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