Professional Ethics and Practice
Core concepts
Understand fiduciary duty and its components - loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care. Know disclosure obligations: material facts, agency relationships, conflicts of interest, and compensation. Grasp fair housing principles prohibiting discrimination based on protected classes, and antitrust rules prohibiting price-fixing, group boycotts, and market allocation among competitors. Understand handling of client funds (escrow, trust accounts), recordkeeping, and continuing education. Know the difference between unethical conduct and illegal conduct, and the duty to avoid misrepresentation in advertising and valuation.
Traps
Questions test whether a dual agency requires informed written consent (it does) and whether a licensee may disclose confidential client information without authorization (generally not). Watch for antitrust scenarios disguised as innocent conversations - discussing commissions with competitors is illegal regardless of intent. Don't confuse the duty to disclose known material defects with an obligation to inspect for unknown ones.
Worked example
A licensee learns the roof leaks. The seller asks the licensee to stay silent. The licensee must disclose the known material defect to the buyer; confidentiality to the seller does not override the duty to avoid misrepresentation and fraud.
Rule of thumb
When confidentiality conflicts with disclosure of a known material defect, disclosure wins - never help a client conceal a material fact.