Agency and License Law Practice Question
Question
A broker is correcting a new licensee’s misunderstanding for the Washington Real Estate Broker Exam involving fiduciary loyalty and seller disclosure and environmental awareness. Which response best applies the rule? (Item 40)
Answer choices
- A. Client funds may be mixed with business funds if the broker reconciles the account later.
- B. The issue can be ignored if the parties want to close quickly.
- C. The rule applies only to commercial transactions and never to residential transactions.
- D. Put the client’s interests ahead of the licensee’s personal interest in a way that fits Washington exam practice.
Correct Answer
D. Put the client’s interests ahead of the licensee’s personal interest in a way that fits Washington exam practice.
Explanation
The correct answer is D because fiduciary loyalty requires candidates to put the client’s interests ahead of the licensee’s personal interest. The Washington reference keeps the scenario tied to state licensing practice, while the other options rely on unsafe assumptions about oral custom, escrow, client preference, independent licensee authority, or ignoring written duties.
Question details
- Difficulty: hard
- Domain: Agency and License Law
- Objective: fiduciary loyalty