Humber/Ontario Real Estate Course 3 Exam Practice

When is a brokerage compelled to disclose all information regarding multiple representation?

1. After a verbal agreement is made

2. Before signing the agreement of purchase and sale

3. After the agreement of purchase and sale is signed

4. Before the seller agrees to the listing

5. During the first property showing

6. After commission discussions

The correct answer is: Before the seller agrees to the listing

The correct answer indicates that a brokerage is required to disclose all information regarding multiple representation before the seller agrees to the listing. This is crucial because the concept of multiple representation involves a brokerage representing both the buyer and seller in a transaction, which raises potential conflicts of interest. Disclosing this information prior to the listing agreement ensures that the seller is fully informed about the implications of dual representation. It allows the seller to understand how the brokerage intends to handle the interests of multiple parties and to make an informed decision about whether to proceed with that representation. By providing this disclosure upfront, the brokerage also fulfills its fiduciary duty and maintains transparency throughout the process, fostering trust and understanding between the parties involved. This timing is essential because it allows the seller to weigh their options and decide if they want to engage the brokerage under these conditions. The other options generally involve moments in the transaction process where the level of knowledge and consent regarding multiple representation might not be preemptively established, which could lead to confusion or concerns about ethical obligations later on. Therefore, the focus on disclosure before the seller commits to the listing is significant in maintaining ethical standards in real estate practice.