California Real Estate Practice Exam

What is required for a Realtor who suggests a purchaser buy appliances from a store in which they have ownership?

1. Must have a license to sell appliances

2. Must reveal his ownership interest

3. Must offer the lowest price guarantee

4. No requirement exists

The correct answer is: Must reveal his ownership interest

The correct answer is that a Realtor must reveal his ownership interest. In any real estate transaction, transparency is crucial, especially when there is a potential conflict of interest. If a Realtor suggests that a purchaser buy appliances from a store they own, it is essential for them to disclose this ownership to the buyer. This disclosure ensures that the buyer is fully informed and can make a decision without any hidden influences affecting the transaction. The law is designed to protect buyers from any undue influence and to maintain ethical standards within the real estate profession. By revealing their ownership interest, the Realtor allows the buyer to assess whether they want to pursue that suggestion based on all relevant information, particularly the potential for bias in the advice given. Other options do not fit the requirements of ethical practice. Having a license to sell appliances is not necessary because the Realtor is not engaged in selling them directly; offering a lowest price guarantee is not a standard requirement in such transactions; and the last choice, which suggests no requirement exists, overlooks the ethical obligations real estate professionals have to their clients. Thus, disclosing ownership interest stands out as the necessary action.