Michigan License Law Practice Test

What is one action that Will cannot take without a signed buyer agency relationship?

1. Help Tim negotiate a good deal on a property

2. Show Tim properties in the area

3. Advise Tim on mortgage options

4. Provide Tim with market analysis

The correct answer is: Help Tim negotiate a good deal on a property

To understand why helping Tim negotiate a good deal on a property is an action that requires a signed buyer agency relationship, it's important to recognize the nature of buyer agency agreements. This type of agreement establishes a formal relationship between a real estate agent and the buyer, defining the agent's role as a fiduciary for the buyer's interests. Negotiating terms for a property is a key function of an agent within this fiduciary capacity, as it involves advocating for the buyer's best interests, ensuring that they receive favorable terms and conditions in the transaction. Without a signed buyer agency relationship, Will does not have the legal authority to represent Tim in negotiations, because he would not be acting in Tim's best interests under the protection of a formal agreement. In contrast, showing properties, advising on mortgage options, or providing market analysis can often be performed in a more informal capacity, where an agency relationship is not necessarily required. These actions do not involve the same level of fiduciary responsibility or negotiation authority that comes with a signed buyer agency agreement, thus making them permissible without such a contract.