A real estate brokerage has a written service agreement with a seller; however, the agreement does not explicitly state that the brokerage will only represent the seller. If an unrepresented buyer approaches the brokerage and is provided with substantial advice on negotiation strategies for the property, what risk does the brokerage face?

Question: A real estate brokerage has a written service agreement with a seller; however, the agreement does not explicitly state that the brokerage will only represent the seller. If an unrepresented buyer approaches the brokerage and is provided with substantial advice on negotiation strategies for the property, what risk does the brokerage face?

Answer options: ✅ They risk inadvertently creating an implied agency relationship with the buyer

• They risk breaching their duty of confidentiality to the seller
• They risk violating the 'no contact' rule with the unrepresented party
• They risk being accused of misrepresentation by the seller

Correct answer: They risk inadvertently creating an implied agency relationship with the buyer

Explanation: Providing substantial advice to an unrepresented party can lead to the creation of an implied agency relationship, even without a written agreement, obligating the brokerage to act in the buyer's best interest and potentially creating a conflict with their existing seller client, as outlined in RECA's agency guidelines.