Humber/Ontario Real Estate Course 4 Exam Practice

When confronted with an insufficient funds issue, what immediate action should a real estate salesperson take?

1. Advise the brokerage and seek guidance

2. Delay paperwork processing

3. Ignore the problem and continue

4. Proceed with deposit as planned

5. Request additional funds from the buyer

6. Transfer existing funds to cover shortfall

The correct answer is: Advise the brokerage and seek guidance

Advising the brokerage and seeking guidance is the appropriate immediate action for a real estate salesperson when faced with an insufficient funds issue. This approach is crucial because it ensures that the salesperson is adhering to company policies and legal standards. The brokerage can provide the necessary support and resources to address the situation effectively, helping to safeguard both the interests of the buyer and the integrity of the transaction. Collaborating with the brokerage also promotes accountability and transparency, which are essential in real estate transactions. It allows for a proper assessment of the circumstances and the potential for finding a solution that maintains the professional standards expected in the industry. Engaging the brokerage can lead to the correct procedures being applied, ultimately protecting both the salesperson and the brokerage from potential liability. Actions such as delaying paperwork, ignoring the problem, proceeding with the deposit as planned, or transferring funds from other sources may compromise the transaction's integrity and can lead to legal complications. These alternatives could place the parties involved at risk and undermine the trust essential to real estate dealings. Additionally, requesting more money from the buyer may not be feasible or appropriate without first consulting with the brokerage.