Humber/Ontario Real Estate Course 4 Exam Practice

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What should a real estate agent do if they find potential structural damage in a house they are appraising?

  1. Immediately inform the client about the risk of nondisclosure.

  2. Record it as a minor issue if the owner dismisses it.

  3. Overlook it as common in similar properties.

  4. Cancel the appraisal due to the severe damage.

  5. List the property and note the issue for potential buyers.

  6. Request an independent structural review.

The correct answer is: Immediately inform the client about the risk of nondisclosure.

The most appropriate course of action for a real estate agent who discovers potential structural damage during an appraisal is to immediately inform the client about the risk of nondisclosure. This ensures that the client is aware of the issue and understands the potential ramifications of not disclosing structural problems, which can lead to significant legal and financial repercussions. The agent has a responsibility to maintain transparency and protect the interests of all parties involved. This approach emphasizes the ethical obligation of the agent to disclose relevant information that could affect the property's value and the buyer's decision. By doing so, the agent minimizes the risk of claims arising from nondisclosure and supports the principle of honesty in the real estate profession. Other options do not adequately address the severity of the situation. For instance, recording the issue as minor if it is dismissed by the owner could lead to ignoring a significant problem, and overlooking it because it is common in similar properties suggests a disregard for the unique circumstances of the property in question. Cancelling the appraisal might not be necessary unless the damage is indeed severe and unmanageable, and simply listing the property without a proper assessment does not provide adequate protection for potential buyers. Requesting an independent structural review could be a prudent step following the immediate disclosure to the client, but

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