Humber/Ontario Real Estate Course 4 Exam Practice

If a Buyer Representation Agreement is signed with a 2.5% remuneration rate, when is Buyer Lopez required to pay remuneration?

1. If the property offers a 3% remuneration rate to the cooperating brokerage

2. If the property offers a 2% remuneration rate to the cooperating brokerage

3. If buying a private sale where the seller pays a 2.5% remuneration rate

4. Buyer Lopez never pays remuneration

5. If the buyer representation agreement includes an automatic payment clause

6. If the seller doesn't pay any remuneration

The correct answer is: If the property offers a 2% remuneration rate to the cooperating brokerage

In a Buyer Representation Agreement with a remuneration rate of 2.5%, the buyer is typically required to pay remuneration when the cooperating brokerage does not offer the agreed-upon rate or higher. In this case, if the property being purchased offers a 2% remuneration rate to the cooperating brokerage, it falls short of the 2.5% stipulated in the Buyer Representation Agreement. As a result, the buyer, Lopez, would be responsible for covering the difference between the remuneration rate offered and the rate agreed upon in the representation agreement. The other scenarios, such as properties offering higher remuneration or private sales where the seller pays a certain rate, do not trigger liability for remuneration under the agreement. In situations where the seller pays more or equal to the agreed rate, Lopez would receive what is due from the seller or cooperating brokerage, making a payment unnecessary. Additionally, clauses regarding automatic payments typically refer to situations where terms have been established in advance, and if the seller decides not to pay any remuneration, the obligation under the agreement activates Lopez's responsibility to cover it.