Humber/Ontario Real Estate Course 3 Exam Practice

If a property listed for sale has concealed issues, how should the listing agent proceed?

1. Highlight all issues in the listing description.

2. Inform potential buyers of significant defects only.

3. Offer a lower price to compensate for hidden problems.

4. Schedule fixes before showing to buyers.

5. Disclose true conditions to avoid future disputes.

6. Suggest buyers conduct thorough inspections.

The correct answer is: Disclose true conditions to avoid future disputes.

Disclosing true conditions to avoid future disputes is vital in real estate transactions. Transparency fosters trust between agents, buyers, and sellers. If a listing agent knows about concealed issues, they have a legal obligation to disclose these to potential buyers. This aligns with the principle of full disclosure, which protects all parties involved by reducing the potential for claims of misrepresentation or breach of contract later on. By being upfront about any issues, the listing agent helps ensure that buyers can make informed decisions, ultimately minimizing disputes post-sale. Such transparency is also crucial for maintaining the agent's professional reputation within the industry. While other approaches might seem reasonable, they do not adequately address the legal and ethical responsibilities associated with property sales. Highlighting all issues may overwhelm buyers, focusing only on significant defects may lead to incomplete information, offering a lower price does not guarantee buyer awareness of the issues, scheduling fixes could be impractical, and suggesting thorough inspections, while generally advisable, does not remove the agent's responsibility to disclose known problems.