California Real Estate Salesperson Exam Practice – Quesiton 23

n

n

n

nnnn

Question

nnnn

When a listing is signed by a seller and a broker, a fiduciary relationship is created between the broker and the:

nnnn

Selections

nnnn

A. Seller

nnnn

B. Buyer

nnnn

C. Seller and buyer

nnnn

D. General public

nnnnnnnn

---

nnnn

Answer: A

nnnn

---

nnnn

5 Keys Summary

nnnn

• The signing of a listing agreement formally establishes a legal agency relationship between the broker and the client.

nnnn

• The seller is defined as the principal (client) who hires the broker to represent them for specific purposes.

nnnn

• The fiduciary relationship, which requires a position of trust and confidence, is directly created between the broker (agent) and the seller (principal) upon execution of the listing agreement.

nnnn

• The broker owes the highest fiduciary duties—including loyalty, obedience, and accounting—to the seller, prioritizing the seller’s interests above everyone else’s.

nnnn

• While the broker must treat third parties (such as the buyer or general public) with fairness and honesty, the full fiduciary relationship and its highest duties are owed exclusively to the principal/seller who signed the employment contract.

nnnn

nnnn

Pages: 1 2 3