Final answer:
The real estate broker may face disciplinary action for guaranteeing a profit on a transaction, which is often against real estate regulations, despite authorization from their principal broker.
Step-by-step explanation:
In real estate, practicing within ethical and legal boundaries is crucial for maintaining professional integrity and avoiding disciplinary action. In this scenario, the principal broker authorizing a real estate broker to personally guarantee a profit on a land transaction is a significant legal concern. The real estate broker's action based on this authorization affects not only their professional conduct but also their legal liability.
Answer
b) The real estate broker may be subject to disciplinary action.
Despite the authorization from the principal broker, it is generally against professional real estate regulations to guarantee a profit on a property transaction. Such guarantees can be misleading and may not take into account the unpredictable nature of the real estate market. If the broker acts on this guarantee, it could likely lead to disciplinary actions by regulatory bodies overseeing real estate practices.
The principal broker is typically responsible for the conduct of the brokers associated with their firm. If a broker associated with the firm makes a guarantee of profit, the principal broker could also have some responsibility. However, regardless of the principal broker's involvement, the guarantee itself is not typically considered a legally binding promise, as market conditions can change and are out of the broker's control.