Texas Real Estate Sales Agent ExamAgencyHard
A real estate sales agent is representing a buyer. The buyer instructs the agent to submit an offer that the agent believes is unrealistically low and unlikely to be accepted, potentially wasting the buyer's time. What is the agent's primary fiduciary duty in this situation?
- AInform the seller's agent that the buyer's offer is likely a waste of time.
- BSubmit the offer as instructed, after advising the buyer of the potential consequences.
- CPersuade the buyer to submit a higher, more reasonable offer.
- DDecline to submit the offer, as it is not in the buyer's best interest.
Show answer & explanationAnswer & explanation
Correct answer: B. Submit the offer as instructed, after advising the buyer of the potential consequences.
The agent's primary fiduciary duty of obedience requires them to follow all lawful instructions from their client, even if they disagree with them, as long as the instructions are legal and ethical. The agent should, however, fulfill their duty of care by advising the client of the potential negative consequences before proceeding.
Why the other options are wrong
- A. Disclosing the buyer's negotiating strategy to the seller's agent would violate the duty of confidentiality and loyalty.
- C. While advising is good, 'persuading' to the point of overriding client instructions can violate the duty of obedience if the instruction is lawful.
- D. Declining to submit a lawful offer violates the duty of obedience.
Obedience (Fiduciary Duty)
A fiduciary duty requiring an agent to promptly and efficiently obey all lawful instructions of the principal, even if the agent believes the instructions are not in the principal's best interest.
- Instructions must be lawful and ethical.
- Agent should advise on consequences, but must still obey.
- Overrides agent's personal judgment if instructions are legal.
Memory trick: LOACH: Loyalty, Obedience, Accountability, Confidentiality, Honesty.