Question

The owner of a vacant tract of land lists it for $250,000. Several weeks later the listing broker became aware of a buyer who would pay as much as $500,000 for the property. The broker thereupon submitted a full-price offer to the owner and purchased the property. The broker then resold the property to the buyer and pocketed a tidy profit. Which one of the following statements is correct?

a) The broker did not violate the law because it is legal for licensees to purchase listed property
b) The broker was in compliance with the law since the owner helped establish the listing price and received the full amount
c) The broker violated the law by failing to waive the commission on property purchased for his/her own account
d) The broker violated the law by not promoting the best interest of the client

Answer 1

The broker violated the law by failing to waive the commission on property purchased for his/her own account.

Step-by-step explanation:

The correct statement is: c) The broker violated the law by failing to waive the commission on property purchased for his/her own account.

The broker's actions in purchasing the property for themselves and then reselling it to the buyer for a profit violated the law because they failed to waive the commission on the property they purchased.

By not waiving the commission, the broker prioritized their own financial gain over promoting the best interest of their client, the property owner.