Maine Real Estate License Practice Exam

What must Walter disclose if he is representing the seller and his company practices appointed agency?

1. He is the agent of the seller and transaction broker to the buyer

2. He is acting as a dual agent

3. He must appoint another agent to the buyer

4. He is the subagent of the seller

The correct answer is: He is acting as a dual agent

When representing the seller in a situation where appointed agency is practiced, it is essential for Walter to clarify his role in the transaction. Appointed agency allows a real estate firm to assign different agents to represent the seller and buyer within the same transaction. In this context, if Walter is representing the seller, he is acting as a dual agent when he has the responsibility to represent both the seller and the buyer. Dual agency occurs when one agent or brokerage represents both parties in a real estate transaction. It necessitates full disclosure to all involved parties about the dual representation, ensuring that both the seller and the buyer understand that the same agent (or company) is representing their respective interests. This is important for maintaining transparency and trust in the transaction. By disclosing that he is acting as a dual agent, Walter acknowledges the potential for conflicts of interest and confirms his commitment to ethical practices. This disclosure is necessary to comply with agency laws and regulations, protecting the interests of both the seller and the buyer.