Humber/Ontario Real Estate Course 4 Exam Practice

For a brokerage dealing with both seller clients and buyer customers, which statement is true about representation?

1. The buyers' interests are not protected by the brokerage.

2. The buyers' interests must be protected if they sign a buyer customer service agreement with the brokerage.

3. The buyers must insert an email address in the 'Notices' section of the agreement of purchase and sale.

4. The confirmation of co-operation and representation should indicate that the listing brokerage is in a multiple representation situation, as the brokerage is working with both the buyers and the sellers in relation to the same transaction.

5. The brokerage must disclose the dual agency status.

6. The buyers are automatically represented by signing a customer service agreement.

The correct answer is: The buyers' interests are not protected by the brokerage.

The accurate statement regarding representation in a situation where a brokerage has both seller clients and buyer customers discusses the brokerage's obligations and the nature of the relationships established through agreements. The correct assessment here revolves around the nuances of buyer representation, especially in the context of dual agency situations. When a brokerage deals with both sellers and buyers, it can create a potential conflict of interest, thus leading to the need for a clear representation strategy. When buyers sign a customer service agreement, the terms of that agreement outline what kind of representation the brokerage is providing to the buyer. In particular, if a buyer customer service agreement is in place, the brokerage indeed has a duty to protect the buyer's interests, as specified in their contractual obligations. This is critical because a brokerage has ethical and legal responsibilities to clearly delineate its role and ensure that all parties understand the nature of the services being provided. Therefore, buyers' interests must be protected if they enter into a customer service agreement, marking that while the brokerage may represent the seller, it is still responsible for upholding certain duties towards the buyer, thereby promoting fair and equitable treatment in transactions. In this circumstance, understanding representation is essential for ensuring both parties are aware of their rights and obligations under the agreement.