California Real Estate Broker ExaminationReal Estate PracticeEasy
A real estate broker receives an offer on a property listed for $500,000. The offer is for $480,000, with a contingency that the buyer must sell their current home within 30 days. The broker presents this offer to the seller. Which of the following is the broker's primary duty in this situation?
- ASuggest the seller counter-offer at full asking price to test the buyer's seriousness.
- BPresent all offers objectively and advise the seller on the potential risks and benefits of each.
- CAdvise the seller to accept the offer immediately to secure a sale.
- DInform the buyer's agent that the offer is too low and unlikely to be accepted.
Show answer & explanationAnswer & explanation
Correct answer: B. Present all offers objectively and advise the seller on the potential risks and benefits of each.
A real estate broker has a fiduciary duty to their client (the seller in this case). This duty includes presenting all offers objectively and providing informed advice, allowing the client to make their own decisions.
Why the other options are wrong
- A. Suggesting a specific counter-offer without exploring all options first is not objective advice.
- C. Advising immediate acceptance without full disclosure of pros and cons goes against fiduciary duty.
- D. It is not the listing broker's role to discourage offers or communicate directly with the buyer's agent about the offer's viability without the seller's instruction.
Broker's Fiduciary Duties
A real estate broker owes specific fiduciary duties to their client, including loyalty, confidentiality, disclosure, obedience, accounting, and reasonable care and skill.
- Always act in the client's best interest.
- Present all offers and material facts.
- Maintain client confidentiality.
Memory trick: Always Be Loyal, Confidential, and Disclosing for Your Client's Best Interest.