Humber/Ontario Real Estate Course 4 Exam Practice

When a buyer is ready to make an offer but hasn't signed a representation agreement, the correct step for Salesperson Michelson is:

1. Proceeding to prepare the offer with verbal disclosures if made.

2. Obligated to have a representation agreement prepared and signed before preparing an offer.

3. Automatically treating the buyer as a customer.

4. Allowing the buyer to refuse the representation agreement and sign a customer service agreement instead.

5. Skipping the agreement step initially.

6. Preparing the offer independently.

The correct answer is: Obligated to have a representation agreement prepared and signed before preparing an offer.

In real estate transactions, it's crucial to establish the nature of the relationship between the salesperson and the buyer. In the absence of a signed representation agreement, the salesperson must take specific steps to comply with legal and ethical obligations. When a buyer is ready to make an offer, having a signed representation agreement is essential. This agreement outlines the duties that the salesperson owes to the buyer, including loyalty, full disclosure, and the obligation to act in the buyer’s best interests. Without this agreement, the salesperson could inadvertently compromise their ability to fully represent the buyer's interests. A lack of a signed representation agreement can lead to potential misunderstandings and can expose both the salesperson and the buyer to risks. Therefore, it is imperative for Salesperson Michelson to ensure that a representation agreement is prepared and signed before proceeding with the offer. This action not only protects the buyer but also ensures that the salesperson adheres to the legal and ethical standards set forth in real estate practices. Other options may erroneously allow the process to proceed without proper disclosures or agreements, possibly jeopardizing the buyer's interests and the integrity of the transaction. Therefore, preparing and signing the representation agreement is the most appropriate and responsible action for the salesperson at this stage.