Humber/Ontario Real Estate Course 3 Exam Practice

Salesperson Jones has a buyer client interested in a property listed by Salesperson Smith, both of whom work for the same brokerage. What is the issue in this situation?

1. A fundamental conflict of interest exists, as the brokerage is representing both the buyer and the seller.

2. There is no conflict of interest, as the parties are seeking the same objective of reaching an acceptable agreement.

3. There is no conflict of interest because Salesperson Jones can represent the best interests of his client, and Salesperson Smith can represent the best interests of his client.

4. As a conflict of interest exists, the buyer must terminate the client relationship and become a customer.

The correct answer is: A fundamental conflict of interest exists, as the brokerage is representing both the buyer and the seller.

In this scenario, the correct answer is A because a fundamental conflict of interest exists when Salesperson Jones, representing the buyer, and Salesperson Smith, representing the seller, work for the same brokerage. This situation creates a potential conflict as the brokerage is representing both sides of the transaction, compromising their ability to provide loyalty, confidentiality, and full representation to either party. It is essential for the parties in a real estate transaction to have independent representation to ensure their best interests are maintained and to avoid any conflicts that may arise. Therefore, in this case, the presence of a fundamental conflict of interest highlights the issue within this situation.