Humber/Ontario Real Estate Course 4 Exam Practice

Which statement about Salesperson Watkins reducing remuneration is correct?

1. Salesperson Watkins is protecting both his and the seller’s interests.

2. Salesperson Watkins has an ethical obligation to disclose remuneration terms to others if it affects the acceptance of offers.

3. Salesperson Watkins is correct not to inform the co-operating brokerage as he only needs to disclose competing offers' existence, not their content.

4. Salesperson Watkins is not obligated to present a second offer as the amended first offer provides the highest net to the seller.

5. Salesperson Watkins can make changes as long as it benefits his client most.

6. Salesperson Watkins must always present the highest offer regardless of amendments.

The correct answer is: Salesperson Watkins has an ethical obligation to disclose remuneration terms to others if it affects the acceptance of offers.

The chosen statement is correct because it emphasizes the ethical responsibility of Salesperson Watkins to disclose remuneration terms when they could influence the decision-making process regarding the acceptance of offers. Transparency in real estate transactions is crucial, as it ensures fairness and helps maintain the integrity of the market. When remuneration changes impact how a seller or buyer might view or respond to offers, such information must be shared with all relevant parties to uphold ethical standards in the industry. In the context of the other options, it's important to note that while protecting interests can be a valid concern, it does not supersede the obligation to disclose material information that could affect negotiations. Additionally, not informing the cooperating brokerage about remuneration details may hinder effective negotiation strategies since all parties must be adequately informed. The idea that Watkins need only disclose the existence of competing offers and not details also misrepresents the ethical obligations he holds. While it is true that he may prioritize net gain to the seller, he still must consider ethical duties in transaction processes and present all relevant offers. Finally, the necessity to present the highest offer at all times overlooks circumstances where an amended offer may, in fact, offer the best outcome for the seller in terms of net gain after commissions and other considerations.