California Real Estate Practice Exam

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A buyer's agency agreement must explicitly state that?

  1. The agent will only show properties listed by their agency

  2. Buyer satisfaction is guaranteed

  3. All commissions are negotiable

  4. Properties will be shown within 24 hours of listing

The correct answer is: All commissions are negotiable

A buyer's agency agreement is a legally binding contract that outlines the terms and conditions between a real estate agent and a prospective buyer. One of the key aspects that must be included in this agreement is the negotiability of commissions. This means that the commission paid to the agent for their services can be discussed and possibly modified. Therefore, options A, B, and D are incorrect because they do not address the important clause of commission negotiability that must be explicitly stated in the agreement. Option A limits the properties that can be shown to those listed by the agency, which may not be in the best interest of the buyer. Option B suggests that the buyer is guaranteed to be satisfied, which is not a realistic expectation in a real estate transaction. And option D imposes a strict timeline on property showings, which may not always be feasible. Thus, option C is the correct answer as it is the only one that relates to the necessary clause of negotiability of commissions in a buyer's agency agreement.

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