Humber/Ontario Real Estate Course 2 Exam Practice

Which statement is true about a straw buyer?

1. Conceals the identity of the actual buyer.

2. Deals with properties at artificially low prices.

3. Is usually not involved in mortgage fraud.

4. Is commonly used to increase sale prices.

5. Is different from a bona fide buyer in documentation only.

6. Is only applicable in commercial real estate transactions.

The correct answer is: Conceals the identity of the actual buyer.

A straw buyer conceals the identity of the actual buyer, making option A the correct choice. In this scenario, the straw buyer is essentially a front for the actual purchaser, who may be someone who is unable or unwilling to openly buy the property for various reasons. Straw buyers are often used to deceive or mislead others involved in the transaction about the true buyer's identity and intentions. The other options are not true statements about straw buyers.