Idaho Real Estate Practice Exam

In Idaho, how can a broker collect a commission from both the seller and the buyer in a dual agency situation?

1. Through offering lower commission rates

2. By providing exclusive buyer services

3. If both parties give their informed consent

4. By having a signed agreement with each party

The correct answer is: If both parties give their informed consent

In a dual agency situation in Idaho, a broker can collect a commission from both the seller and the buyer if both parties give their informed consent. This practice is rooted in the principles of agency law and underscores the importance of transparency and disclosure in real estate transactions. When a broker represents both the buyer and the seller, it creates a potential conflict of interest, as the broker must balance the competing interests of both parties. To navigate this situation ethically and legally, it is crucial that both the seller and the buyer are fully informed about the broker’s dual role and agree to it. This consent ensures that both parties understand that the broker is not solely advocating for one side, but is providing a level of service to both, which could affect negotiations and outcomes. While having a signed agreement with each party can further clarify the terms of representation, the key factor in this case is the informed consent of both the seller and the buyer. Without this consent, the broker could face legal repercussions for failing to adequately disclose the nature of their dual representation. Thus, informed consent serves as the foundation for a broker's ability to collect commissions from both sides in a dual agency scenario.