Question

A licencee presented an offer from their buyer client directly to a "For Sale By Owner" seller.

The seller accepted the buyer's offer.

Based ONLY on what is stated,

which of the following statement is the BEST answer?

Select one:

a. The licensee failed to discuss
agency and make proper disclosure to the seller and is in violation of Article 15.

b. The licensee has an agency relationship with the buyer; therefore, even if there is no compensation agreement between the licensee and the buyer, the sponsoring broker will be paid by the seller.

c. The buyer's broker had no compensation agreement with the seller, but because the licensee brought a buyer, the seller will have an obligation to pay a commission to their managing broker.

d. The licensee has no brokerage obligations in this situation, since the property was "For Sale by Owner".

Answer 1

The correct answer is not clear without more details on agency relationships and compensation agreements within the jurisdiction. Real estate licensees should make proper disclosures and buyers and sellers are expected to make well-informed decisions in a freely competitive market.

Step-by-step explanation:

The scenario described involves a licensee presenting an offer from their buyer client to a 'For Sale By Owner' (FSBO) seller, which the seller accepted. According to the information given, the correct answer out of the provided options is not clear because ethical and legal obligations in real estate transactions can vary by jurisdiction and more specific details would be required to determine compliance with those obligations, such as whether or not adequate disclosure was made and if a compensation agreement is in place.

Real estate licensees typically have a duty to discuss agency relationships and make proper disclosures, which includes revealing to the FSBO seller that they represent the buyer. If there is no written compensation agreement with the seller (which is common in FSBO situations), typically the licensee's sponsoring broker will not be automatically entitled to a commission from the seller. However, it is also common practice in some areas for the buyer to pay the buyer's broker commission if the seller does not. This relationship and potential compensation should be clearly stated in the buyer's brokerage agreement.

Real estate markets assume that buyers and sellers act independently and with full knowledge of market conditions. They must also be free to enter and leave the market as they choose. Availability of accurate information to all parties is key to a fair transaction.