21. A real estate professional working with a buyer has disclosed the options for representation under state law, but has not signed a buyer representation agreement and considers the buyer a customer. While showing the buyer a property, which of the following statements by the professional could create implied agency in a jurisdiction where the common law of agency prevails
Answer: C
Offering a lower price due to repairs could create implied agency.
Suggesting that the buyer should offer $20,000 less than the asking price because of needed repairs indicates a level of advice and advocacy that goes beyond mere information sharing, which could imply an agency relationship under common law.
A) You should consider having any property inspected by a professional
This statement suggests a general best practice without advocating for a specific action regarding the buyer's negotiation strategy. It does not create an implied agency because it does not indicate a commitment to the buyer's interests beyond a standard recommendation.
B) You should speak to an attorney about how to take title to the property
Recommending that a buyer consult an attorney is a neutral, informational suggestion that does not imply an agency relationship. This advice is standard and does not reflect a level of representation or advocacy for the buyer's interests.
C) You should offer $20,000 less than the asking price due to the repairs needed on this property
This statement provides specific negotiation advice that directly influences the buyer's strategy in a way that suggests the professional is acting in the buyer's interest. Such direction can lead to a perception of agency, particularly if the buyer relies on this advice to make decisions.
D) You should be prequalified by a lender since most sellers will request this information when you make an offer
This recommendation is practical and procedural, aimed at preparing the buyer for the market. It does not suggest a strategic position in negotiations and therefore does not create an implied agency relationship.
Conclusion
The suggestion to offer $20,000 less due to repairs is the only option that implies a level of representation and negotiation on behalf of the buyer, thereby creating potential implied agency. In contrast, the other options provide general advice or procedural recommendations without advocating for a specific action that aligns with the buyer's interests, which is essential for establishing an agency relationship.