Texas Crammer Practice Exam

A listing agent tells a buyer that the seller won't accept anything under a specified amount. What does this imply regarding the agent's conduct?

1. The agent acted in the seller's best interest

2. The agent violated their fiduciary duty to the seller

3. The agent encouraged more offers

4. The agent facilitated negotiation

The correct answer is: The agent violated their fiduciary duty to the seller

The correct answer indicates that the agent violated their fiduciary duty to the seller by disclosing the seller’s minimum acceptable price to the buyer. In real estate, agents owe fiduciary duties to their clients, which include loyalty, confidentiality, and full disclosure of material facts. By revealing the seller's bottom line, the agent undermines their client’s position in negotiations, as it gives the buyer an advantage. This kind of disclosure can lead to a lower selling price or fewer offers, as buyers may be inclined to offer amounts just above the specified minimum instead of negotiating freely based on their own perception of value. Maintaining confidentiality around a seller's minimum and maximum price is essential for the integrity of the negotiation process and ensures that the seller's interests are upheld.