Humber/Ontario Real Estate Course 4 Exam Practice

Under what condition can a salesperson receive a finder’s fee from a lender?

1. As long as the amount exceeds $300

2. When directly paid by the lender

3. Only with approval from the buyer

4. When disclosed to the client and paid through the employing brokerage

5. When included in the buyer representation agreement

6. If it is part of a mutually agreed commission

The correct answer is: When disclosed to the client and paid through the employing brokerage

A salesperson can receive a finder's fee from a lender under the condition that it is disclosed to the client and paid through the employing brokerage. This ensures transparency in the transaction and aligns with ethical standards in real estate practices. Disclosing the finder's fee maintains the integrity of the relationship between the salesperson and their client, as it prevents any potential conflicts of interest or undisclosed financial incentives that may affect the advice or service provided to the client. When the finder's fee is processed through the employing brokerage, it also assures that the transaction adheres to industry regulations. This system of oversight helps mitigate risks for both the client and the salesperson, as all parties have a clear understanding of the compensation structures involved. This requirement reflects best practices in real estate and the emphasis on maintaining trust and transparency in professional relationships. Other conditions, such as the amount of the fee or direct payment by the lender, do not inherently address the ethical obligations and transparency necessary in real estate transactions. The focus here is on the importance of disclosure and proper handling through the brokerage, which fosters a trustworthy environment for all parties involved.