Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

According to ethical guidelines, whose interest must a license holder prioritize?

1. Their own interest

2. Their principal's interest

3. The market's interest

4. Their agency's interest

The correct answer is: Their principal's interest

In the context of real estate transactions and ethical guidelines, a license holder is obligated to prioritize their principal's interest. This principle is rooted in the fiduciary duty that exists between a real estate agent and their client. A fiduciary duty is a legal and ethical relationship of trust, where the agent must act in the best interests of their client, known as the principal. The reasoning behind this obligation is that real estate agents are often entrusted with sensitive information and financial decisions of their clients. By prioritizing the principal's interest, the license holder ensures that they are acting with loyalty and care, making decisions that advance their client's goals, whether that involves securing the best price in a sale or finding the right property in a purchase. Focusing on the principal’s interest serves to build a strong and trustworthy relationship, which is fundamental in real estate transactions. This not only creates better outcomes for clients but enhances the reputation of the agent and overall trust in the profession. While the other interests mentioned may be relevant in different contexts, they do not take precedence over the responsibility that the license holder has toward their principal.