Law of Agency Study Guide for Exam 1 Latest Version 2023
Duties of an agent - page 30 - CORRECT ANS - OLDCAR:
• Obedience
• Loyalty
•
... [Show More] Disclosure
• Confidentiality
• Accounting
• Reasonable care
OBEDIENCE:
An agent is obligated to follow all of the lawful instructions of a client. A client may reasonably expect an agent to arrange for certain services to be performed.
(ex: a client may ask for a survey, an appraisal, or an inspection report.)
LOYALTY:
Loyalty means putting the interests of a client first. The duty of loyalty is limited by the duty of honesty to all parties. As part of the requirements of loyalty to a seller, a broker/agent must work diligently to secure an acceptable offer on the property.
DISCLOSURE:
An agent has a duty of full disclosure of all information relating to the property and the other parties in the transaction. Full disclosure includes such things as the broker's opinion of value, negotiation strategies, or techniques to assist the client in negotiating the transaction, motivation of the other parties, and the financial condition of the other party.
CONFIDENTIALITY:
An agent must keep any confidential information he/she learns about a client confidential forever. He/she may not disclose it without the client's written consent. The only confidential information an agent may disclose is information the law requires to be disclosed, such as information regarding the condition of the property or the title.
ACCOUNTING:
If a broker holds any funds for a client or a customer, the funds are held in trust, and the broker must place them in a separate account set up for this purpose. Commingling is mixing clients' funds with a broker's business, operating, or personal funds, and TRELA prohibits it. A more serious offense would be conversion. When a broker spends his or her client's funds without authorization, that broker is guilty of conversion.
REASONABLE CARE:
Reasonable care requires that an agent exhibit competence and expertise, keep clients informed, and take proper care of clients' property. Reasonable care includes verifying all information related to a transaction and securing and locking all doors and windows after a showing.
• guiding the seller to arrive at a reasonable listing price
• advising the seller-client to accept a reasonable purchase price from a buyer-client, always in light of current market values
• making reasonable efforts to sell the property, such as Open Houses, MLS, Advertising, etc.
• making available properties that meet the buyer's purchasing objectives
• Affirmatively discovering relevant facts and disclosing these facts to the client
• investigating the material facts related to the sale, and asking the seller questions (the duty to question) that will clarify the seller's needs and protect the seller's best interests
• preparing and explaining the provisions of the listing form, buyer-rep agreement, purchase contract, and other relevant legal documents
• recommending that the client seek independent expert advisers, such as attorneys, inspectors, appraisers, and accountants, when appropriate
• helping the principals meet deadlines and closing dates [Show Less]