Maine Real Estate License Practice Exam

What happens if a listing licensee discloses the seller's motivation for selling without permission?

1. It is expected of the listing licensee to assist in procuring the transaction

2. It is a discretionary disclosure by the listing licensee

3. It is not relevant to the transaction

4. It is a violation of the listing licensee's fiduciary duties

The correct answer is: It is a violation of the listing licensee's fiduciary duties

The correct answer highlights the importance of the fiduciary relationship that exists between a listing licensee and their client, the seller. When a listing licensee agrees to represent a seller, they are bound by fiduciary duties which include loyalty, confidentiality, and disclosure. These duties require the licensee to act in the best interests of the seller and protect sensitive information, including the seller's motivation for selling. Disclosing the seller's motivation without permission can harm the seller's bargaining position in the transaction. For instance, if potential buyers are aware that the seller is eager to sell due to financial distress, they may take advantage of this situation and offer a lower price. Therefore, maintaining confidentiality regarding the seller's motivations is crucial in upholding the fiduciary responsibility that the licensee has. This understanding of fiduciary duty is fundamental in real estate practice, where trust and confidentiality are components of a successful agent-client relationship. Breaking this duty can lead to legal consequences and damage to the licensee's professional reputation.