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

What could happen if an agent suggests a specific contractor or specialist?

1. They will receive a referral fee

2. They may be held liable for dissatisfaction

3. Nothing, it's always allowed

4. They could face criminal charges

The correct answer is: They may be held liable for dissatisfaction

When an agent suggests a specific contractor or specialist, it can lead to potential liability for dissatisfaction. This is because the agent's recommendation implies an endorsement of the quality of the work or services provided by that contractor or specialist. If the client proceeds with the recommendation and is unsatisfied with the results, they may hold the agent accountable for their suggestion, claiming that it was not in their best interest. The need for agents to be diligent in their referrals is rooted in the principle of fiduciary duty, which requires them to act in the best interest of their clients. If an agent fails to do thorough due diligence when recommending a contractor, they can open themselves up to legal repercussions, such as a negligence claim. In contrast, while receiving a referral fee could be a possibility in some scenarios, such arrangements are often regulated and require disclosure to clients, emphasizing transparency in the agent-client relationship. Moreover, suggesting a contractor or specialist isn't inherently illegal or prohibited, but it does come with the risk of liability if the outcome does not meet the client's expectations.