Humber/Ontario Real Estate Course 2 Exam Practice

What must a brokerage ensure when representing a buyer or a seller in a transaction?

1. That all material facts and details known by the brokerage are disclosed to the client.

2. That only favorable information to the client is disclosed.

3. That the brokerage’s interest is protected first.

4. No disclosure is necessary if it's detrimental to the transaction.

The correct answer is: That all material facts and details known by the brokerage are disclosed to the client.

When representing a buyer or a seller in a transaction, a brokerage must ensure that all material facts and details known by the brokerage are disclosed to the client. This is crucial to uphold the principle of full disclosure and to ensure transparency in the real estate transaction. Providing all relevant information to the client allows them to make informed decisions and helps in fostering trust between the client and the brokerage. Option B is incorrect because disclosing only favorable information would go against the duty of honesty and full disclosure that a brokerage owes to its clients. Option C is incorrect because the brokerage's primary duty should be to act in the best interests of the client, not prioritize its own interests. Option D is incorrect because non-disclosure of material facts that could affect the transaction is unethical and goes against the regulatory requirements in real estate transactions.