Humber/Ontario Real Estate Course 4 Exam Practice

What should a brokerage disclose concerning the seller’s decision process with multiple offers?

1. The number of offers and combine them for final offer.

2. Number of competing offers without revealing terms.

3. Details about the highest offer only.

4. Only disclose to client agencies but not to potential buyers.

5. Manner in which offers were received.

6. Final decision sequence without disclosing details.

The correct answer is: Number of competing offers without revealing terms.

The correct choice is the option that aligns with the ethical guidelines and regulatory framework in real estate transactions concerning multiple offers. Disclosing the number of competing offers without revealing their specific terms upholds transparency while protecting confidentiality. This approach allows potential buyers to understand the competitive nature of the situation, encouraging them to submit strong offers without compromising the seller's negotiating position or the privacy of the other buyers' offers. Disclosing the number of offers signals to buyers that there is competition, which can motivate them to enhance their own offer. However, revealing the terms of the offers could violate the privacy of the other parties involved and undermine the seller’s negotiating leverage. In the context of real estate, maintaining confidentiality while providing adequate information fosters trust and enables a fair bidding process. Other options, such as revealing details about the highest offer or combining offers, could lead to unfair practices or violate confidentiality agreements. Disclosing to client agencies but not to potential buyers limits important information from those actively engaged in the market, while revealing the methodology of how offers were received could also compromise the fairness of the process. Disclosing the final decision sequence without specific details does not provide meaningful insight to active participants in multiple offers, potentially leading to confusion and lack of trust in the transaction process.