Humber/Ontario Real Estate Course 3 Exam Practice

When meeting a prospective buyer, what must Salesperson Mikar explain about buyer representation?

1. Material facts are disclosed equally whether the buyer is a client or customer.

2. Negotiation details shared by a customer are not disclosed to the seller.

3. Representation comes with no additional fiduciary duties.

4. Clients and customers receive the same level of service.

5. Clients are owed fiduciary duties but customers are not.

6. An agreement isn't necessary for customer level services.

The correct answer is: Clients are owed fiduciary duties but customers are not.

The correct choice emphasizes the fundamental distinction in real estate representation between clients and customers. When a salesperson enters into a buyer representation agreement, the relationship established is one of fiduciary duty, meaning the salesperson is obligated to act in the best interests of the client. This includes providing full disclosure of material facts and maintaining confidentiality regarding the client’s information, which is integral to building trust and ensuring that the salesperson acts loyally on behalf of the client. On the other hand, customers do not enjoy the same level of protection or duty from the salesperson. They are typically treated more as transactional partners without the fiduciary obligations. This means that while customers may receive certain services, they do not have the benefit of the same obligations owed to clients, such as loyalty or full confidentiality. This distinction is crucial for real estate professionals to communicate clearly, as it influences how they manage relationships and information in the buyer's process. Understanding this difference helps clarify the responsibilities that salespeople assume when accepting clients versus those they serve merely as customers.