Idaho Real Estate Practice Exam

What is true regarding a buyer who wishes to purchase a house listed by their broker?

1. They must involve another brokerage

2. There is a legal conflict of interest

3. There is no legal connection between the buyer and broker

4. The broker must offer a discount on the commission

The correct answer is: There is no legal connection between the buyer and broker

The notion that there is no legal connection between the buyer and the broker is indeed accurate in this context. In many real estate transactions, a buyer may approach a property listed by their broker; however, this does not inherently create a legal obligation or a fiduciary relationship between the buyer and the broker unless they have entered into a specific agreement, such as a buyer representation agreement. This indicates that the buyer can still choose to work with their broker in purchasing the house without a prior agreement that binds them legally. It is common for buyers to work with their own broker to facilitate the purchase, and the absence of a legal connection means the buyer has the freedom to negotiate the terms independently. When considering the other options, involving another brokerage is not necessary and could actually complicate the transaction unless desired by the buyer. A conflict of interest typically arises when a broker represents both the seller and the buyer without proper disclosures and consent. Lastly, while the broker can choose to offer incentives such as a discount on their commission, there is no legal requirement to do so, making that option variable rather than mandatory. Each of these illustrates that while a buying broker may have a vested interest in a sale, it does not limit the buyer's ability to operate without extended legal