Humber/Ontario Real Estate Course 4 Exam Practice

According to the Code of Ethics, what must a brokerage disclose when the seller has multiple offers?

1. The seller must review offers sequentially in the order received.

2. Number of competing offers to persons making offers on the seller's property.

3. Terms of competing offers to persons making offers.

4. Both the number and terms of competing offers to persons making offers.

5. Number of offers and the seller’s decision process.

6. None of these details must be disclosed.

The correct answer is: Number of competing offers to persons making offers on the seller's property.

The correct choice highlights the requirement for the brokerage to inform potential buyers about the number of competing offers on a seller's property. This disclosure is designed to promote transparency within the market and ensure that all parties have a clear understanding of the competitive landscape. This requirement plays a crucial role in fostering trust in the real estate transaction process. By knowing how many other offers are on the table, buyers can make informed decisions and adjust their own offers accordingly. This approach discourages any perceived unfairness and helps to mitigate issues related to competitive practices among real estate listings. In this context, while understanding the offer terms could influence a buyer's strategy, disclosing the actual terms of competing offers may breach confidentiality agreements and is not mandated by the Code of Ethics. Similarly, while it is essential to maintain a process for reviewing offers, the brokerage is not required to share the seller's decision-making process or the order in which offers are reviewed. Therefore, the focus remains solely on providing the number of offers, which preserves a level of confidentiality while ensuring a fair competitive environment.