Question

The seller wants to sell his home before he can buy a bigger one. The broker...

1) May use the Contract to Buy and Sell as an offer to purchase the property, no addendum needed
2) May not purchase his client's home
3) Must use both the Contract to Buy and Sell as well as the Licensee Buy Out addendum to purchase the home
4) May use the Licensee Buy Out Addendum alone without the Contract to Buy and Sell to purchase the home

Answer 1

A broker purchasing a client's property must use both the Contract to Buy and Sell and the Licensee Buy Out Addendum to ensure transparency and protect the client's interests.

Step-by-step explanation:

The question concerns the appropriate contractual documents required when a broker intends to purchase a property from a client. If a broker is purchasing their client's home, they must adhere to certain ethical rules and legal frameworks. In this scenario, the broker should use both the Contract to Buy and Sell as well as the Licensee Buy Out Addendum.

The Contract to Buy and Sell stipulates the terms of the sale, while the Licensee Buy Out Addendum accounts for the unique situation where the broker is also the buyer, ensuring transparency and ethical conduct in the transaction. Both documents together protect the interests of the client, making sure the broker does not take advantage of their position.