When a buyer is referred to as a 'customer', what does this indicate about their status with the firm?

When a buyer is referred to as a 'customer', what does this indicate about their status with the firm?

• A. The buyer has a formal agency relationship
• B. The buyer is not represented by the firm
• C. The buyer is a potential investor
• D. The buyer is seeking multiple agency representation

Answer: (B)

When a buyer is referred to as a 'customer', it indicates that the buyer is not represented by the firm. This terminology is important in real estate as it delineates the nature of the relationship between the buyer and the brokerage. A 'customer' does not have a legally binding agency relationship with the brokerage, meaning that the firm is not obligated to represent the buyer's interests as they would for a client. Customers may seek assistance, but the firm’s obligations are limited in that they provide information without a fiduciary duty towards the buyer. This contrasts with clients, who have a formal agency relationship that requires the broker to act in the client’s best interests.

When a buyer is referred to as a 'customer', it indicates that the buyer is not represented by the firm. This terminology is important in real estate as it delineates the nature of the relationship between the buyer and the brokerage. A 'customer' does not have a legally binding agency relationship with the brokerage, meaning that the firm is not obligated to represent the buyer's interests as they would for a client.

Customers may seek assistance, but the firm’s obligations are limited in that they provide information without a fiduciary duty towards the buyer. This contrasts with clients, who have a formal agency relationship that requires the broker to act in the client’s best interests.