PSI Virginia Real Estate Practice Exam

What is a key duty of a broker to a client versus a customer?

1. Providing professional advice to a client, but only factual information to a customer

2. Only providing advice to customers

3. Maintaining less confidentiality with clients

4. Treating clients and customers the same

The correct answer is: Providing professional advice to a client, but only factual information to a customer

A key duty of a broker to a client versus a customer is the obligation to provide professional advice to a client while offering only factual information to a customer. This distinction is crucial in real estate practice. When a broker represents a client, there is a fiduciary relationship that mandates the broker to act in the best interests of the client. Such responsibilities include providing expert guidance, advocating for the client's needs, and maintaining confidentiality about the client's personal and financial information. This professional advice can span various aspects, such as pricing strategies, market conditions, and legalities involved in a transaction. In contrast, the relationship with a customer, who is a third party in a transaction not represented by the broker, does not carry the same obligations. The broker must provide accurate and honest information to the customer, but they do not owe them the same level of loyalty, confidentiality, or advice that is owed to a client. Thus, while a client receives tailored and strategic advice, a customer’s relationship is more transactional, focusing primarily on sharing facts necessary for the transaction.