Humber/Ontario Real Estate Course 3 Exam Practice

If Salesperson Watkins lowers his commission by $5,000 to ensure his client's offer is accepted without informing others, what is required under the Code of Ethics?

1. Disclose adjusted remuneration to all parties involved

2. Ensure the amendment guarantees the highest net to the seller

3. Inform only co-operating brokerage of the adjusted commission

4. Maintain confidentiality about all financial adjustments

5. Only disclose the existence of competing offers

6. Present the second offer without disclosure of remuneration adjustments

The correct answer is: Disclose adjusted remuneration to all parties involved

In the context of the Code of Ethics, Salesperson Watkins lowering his commission by $5,000 without informing others creates a scenario where transparency is crucial. The requirement to disclose adjusted remuneration to all parties involved ensures that everyone has complete and fair knowledge of the terms under which the offer is being presented. This transparency upholds the ethical standards of fair dealing and honesty in real estate transactions. When commission adjustments occur, all parties must be aware of these changes to avoid any perceived dishonesty or manipulation in the negotiation process. This disclosure helps maintain trust and integrity among stakeholders, including the buyer, seller, and co-operating brokerages. Options focusing on ensuring the highest net to the seller, informing only certain parties, maintaining confidentiality, or presenting competing offers without disclosure do not align with the ethical obligation to inform all relevant parties about significant changes affecting the transaction. The emphasis on disclosure is fundamental to promote transparency and fairness in real estate practices, making it the most appropriate response in this scenario.