Humber/Ontario Real Estate Course 3 Exam Practice

What is the rule for a salesperson when contacting a 'For Sale by Owner' (FSBO)?

1. A FSBO would not agree to a brokerage showing the property and bringing an offer.

2. If the property is being shown to your buyer client, it's acceptable to rely on seller-provided property details.

3. A salesperson should quickly verify that the FSBO has not signed an exclusive seller representation agreement.

4. A customer service agreement is irrelevant in the case of a For Sale By Owner.

The correct answer is: A salesperson should quickly verify that the FSBO has not signed an exclusive seller representation agreement.

The reasoning behind the correctness of the choice emphasizes the necessity for a salesperson to ensure that the FSBO (For Sale By Owner) has not entered into an exclusive representation agreement with another broker before initiating contact or showing the property to potential buyers. This is crucial because exclusive representation agreements legally bind the seller to work exclusively with a specific brokerage for a set period. If such an agreement exists, it prohibits the salesperson from representing the buyer or negotiating on their behalf for that property. Being aware of existing agreements not only helps protect the interests of all parties involved but also adheres to ethical standards and legal guidelines in real estate transactions. By confirming the absence of such agreements, the salesperson can avoid potential legal ramifications or conflicts of interest. This context also highlights the importance of due diligence in real estate practices, ensuring that all relevant documents and agreements are thoroughly checked before proceeding with negotiations or showings.