If a client requests to list their home for much more than the comparable market analysis (CMA) recommends, what is the duty of the salesperson?

A real estate salesperson's fiduciary duty of care and diligence requires them to provide competent advice and counsel to their clients. When a client suggests a list price significantly different from what a comparable market analysis (CMA) indicates, the salesperson's professional responsibility is to advise the client on the potential consequences of overpricing. This includes a longer time on the market, fewer showings, and potential appraisal issues for a buyer's financing. This counsel allows the client to make an informed decision that is in their best interest, thereby fulfilling the agent's duty. The ultimate decision on the list price, however, remains with the client.

A. A salesperson can recommend an appraisal to support a price, but they cannot require the client to obtain one as a condition of listing.

B. Accepting an overpriced listing is not, in itself, a violation of the Pennsylvania Real Estate Licensing and Registration Act (RELRA). It is a business decision.

D. Providing financial or investment advice is outside the scope of a real estate license and could be considered the unauthorized practice of another profession.

1. Pennsylvania Code, Title 49, Chapter 35, Subchapter E. § 35.331. Duties of seller's agent. This regulation outlines the duties of a seller's agent, which includes the duty to "(4) Exercise reasonable professional skill and care." Providing a CMA and advising the client on a realistic list price based on market data is a direct application of this duty. The code does not mandate refusing a listing based on price nor require an appraisal.

2. Ling, D. C., & Archer, W. R. (2018). Real Estate Principles: A Value Approach (6th ed.). McGraw-Hill Education. In Chapter 11, "Real Estate Brokerage and Listing Agreements," the text discusses the agent's role in providing a market analysis to help the seller determine a realistic asking price. The agent's function is described as advisory, emphasizing that "the broker cannot force the seller to accept a particular price" but has a duty to provide competent advice based on market evidence (pp. 298-299).

3. Jacobus, C. J. (2022). Real Estate Principles (13th ed.). Dearborn Real Estate Education. Chapter 10, "Agency," details the fiduciary responsibilities of an agent. The duty of care includes using one's skills and experience to the client's benefit, which involves providing sound advice on matters like pricing. The text clarifies that giving advice outside one's area of expertise, such as financial investment advice (Option D), is a breach of this duty (pp. 170-171).