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In a single agent relationship, what must a broker do if they believe a principal's instructions may cause harm?

  1. Continue carrying out the instructions regardless

  2. Inform the principal of their opinion

  3. Delegate the task to another agent

  4. Withdraw from the relationship immediately

The correct answer is: Inform the principal of their opinion

In a single agent relationship, a broker has a fiduciary duty to act in the best interests of their client, known as the principal. If the broker believes that the principal's instructions may cause harm, it is vital for the broker to inform the principal of their opinion regarding the potential risks involved with following those instructions. This action aligns with the broker’s duty to provide honest and full disclosure, allowing the principal to make informed decisions. By communicating their concerns, the broker helps protect the client from the possible consequences of harmful decisions, fostering a more responsible and ethical approach to the real estate transaction. This communication is a critical part of maintaining trust and upholding the standards of professional conduct in real estate practices. It promotes the principle that a broker cannot merely follow instructions if those instructions jeopardize the client's interests, thus reinforcing the broker's role as an advisor rather than a simple facilitator.