A listing agent tells a prospective buyer, without the seller's permission, that the seller will accept $20,000 less than the list price. Which fiduciary duty has the agent breached?
- Accounting
- Obedience
- Confidentiality
- Reasonable care
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C. Confidentiality
An agent must put the client's interests first and keep the client's price and motivation confidential. Revealing the seller's bottom line weakens the seller's bargaining position. Accounting concerns the handling of money.
Reference: Fiduciary duties: loyalty and confidentiality
A seller's agent receives a written offer far below the list price and feels sure the seller will be insulted. What must the agent do?
- Return the offer and ask for a higher price
- Hold the offer until a better one arrives
- Reject the offer on the seller's behalf
- Present the offer to the seller promptly
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D. Present the offer to the seller promptly
The duty of disclosure requires the agent to present every offer promptly; deciding whether to accept, reject or counter belongs to the seller. An agent has no authority to reject or screen offers unless the seller has instructed so in writing.
Reference: Fiduciary duties: disclosure; presentation of offers
A broker deposits a buyer's earnest money check into the broker's personal checking account along with the broker's own funds. This is called:
- Steering
- Commingling
- Novation
- Puffing
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B. Commingling
Mixing client funds with the broker's own money is commingling and breaches the duty of accounting. Funds belonging to others must be kept in a separate trust or escrow account. Using those funds for the broker's own purposes is the further wrong of conversion.
Reference: Fiduciary duties: accounting; commingling