Idaho Real Estate Practice Exam

In a regulated real estate transaction, what must an actively licensed real estate person do when selling their own residence?

1. Disclose they are a licensed agent to the buyer

2. Set a higher asking price than market value

3. Use a different brokerage to avoid conflict of interest

4. Sell the property without informing potential buyers

The correct answer is: Disclose they are a licensed agent to the buyer

When a licensed real estate professional is selling their own residence, it is essential for them to disclose their status as a licensed agent to the buyer. This disclosure is a matter of transparency and ethical conduct, as it allows the buyer to understand that they are entering into a transaction with someone who has expertise in real estate. This can indeed influence the dynamic of the negotiation and the buyer's perception of the transaction. Transparency in real estate transactions helps to protect the interests of both parties, ensuring that the buyer is fully informed about who they are dealing with and the potential implications of the agent's knowledge and experience in the market. This ethical obligation often stems from regulations governing real estate practices, which emphasize the importance of honesty and integrity in dealings. Setting a higher asking price than market value may not necessarily reflect ethical standards or fair practice in the transaction. Utilizing a different brokerage could be seen as avoiding conflict, but it's not a requirement for a licensed individual selling their own property. Selling the property without informing potential buyers goes against ethical standards and legal requirements, as it could be considered deceptive and harmful to the buyer's interests. Disclosing one’s status as a licensed real estate agent is essential to fostering trust and upholding professional standards in the real estate industry.