Humber/Ontario Real Estate Course 4 Exam Practice

If a seller asks a salesperson about the conditions in an offer and their tax implications while not being represented, what should the salesperson do?

1. Fully address any questions to move the negotiations forward.

2. Insist the seller get a real estate brokerage to represent him.

3. Provide advice on conditions, but not on tax matters.

4. Assist the seller by being honest without implying an agency relationship.

5. Offer no assistance and refer all questions to legal counsel.

6. Provide tax advice but not about the conditions.

The correct answer is: Assist the seller by being honest without implying an agency relationship.

When a seller is not represented and asks a salesperson about the conditions in an offer and their tax implications, the appropriate approach is to assist the seller by being honest without implying an agency relationship. This means that the salesperson can provide general guidance about the nature of the conditions but must avoid giving detailed legal or tax advice as it could lead to misunderstandings about the potential risks and responsibilities involved. Salespersons have a duty to operate transparently to avoid creating expectations that they are acting in an agency capacity for the unrepresented seller. This helps maintain ethical standards and ensures that both parties are aware of the nature of their relationship. Furthermore, by being honest, the salesperson fosters trust and provides valuable insights without overstepping the boundaries of their role. The other options, such as insisting the seller secure representation or providing specific tax advice, could either unnecessarily complicate the situation or lead to potential liability for the salesperson by stepping into areas that require licensed expertise.