California Real Estate Broker ExaminationAgencyMedium
A buyer's agent is showing a property to a client. During the showing, the agent observes a significant crack in the foundation that was not disclosed by the seller. The agent points out the crack to the buyer and advises them to get a professional inspection. This action demonstrates which of the agent's fiduciary duties to the buyer?
- ALoyalty
- BReasonable Care and Diligence
- CConfidentiality
- DObedience
Show answer & explanationAnswer & explanation
Correct answer: B. Reasonable Care and Diligence
The duty of reasonable care and diligence requires an agent to use their skills and expertise to discover and disclose material facts, and to advise their client appropriately. Pointing out a defect and recommending an inspection demonstrates this duty.
Why the other options are wrong
- A. Loyalty focuses on acting in the client's best interest, not specifically on property inspection.
- C. Confidentiality relates to protecting client information, not property defects.
- D. Obedience relates to following lawful instructions, which isn't the primary action here.
Duty of Reasonable Care and Diligence
An agent's fiduciary duty to exercise the degree of care and skill that a reasonably prudent and competent real estate licensee would use in the same circumstances, including investigating facts and advising the principal.
- Exercise professional skill and expertise.
- Investigate material facts.
- Advise principal on important matters.
- Avoid negligence or lack of effort.
Memory trick: OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable Care.