California Real Estate Practice Exam

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The principle of loyalty as a fiduciary requires the agent to prioritize the interests of who?

  1. The agent themselves

  2. The principal

  3. Both the buyer and seller equally

  4. The highest bidder

The correct answer is: The principal

A fiduciary is a person or entity who is in a position of trust and confidence and owes a duty of loyalty to another person or entity. In this case, the agent is the fiduciary and is obligated to prioritize the interests of the principal, who is the person or entity that has hired the agent to act on their behalf. Options A, C, and D are incorrect because they do not prioritize the interests of the principal, which is the primary duty of a fiduciary. The agent themselves, as option A suggests, should not prioritize their own interests over those of the principal. Similarly, option C and D prioritize the interests of other parties (the buyer and the highest bidder) over the principal, which would be a breach of loyalty as a fiduciary.

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