Humber/Ontario Real Estate Course 3 Exam Practice

When might a buyer be liable to pay brokerage remuneration?

1. If the offered remuneration is less than the agreed rate.

2. If the seller in a private sale agrees to cover the brokerage fee.

3. Only when the seller does not cover all brokerage fees.

4. If the seller offers no payment to the cooperating brokerage.

The correct answer is: If the offered remuneration is less than the agreed rate.

The situation where a buyer might be liable to pay brokerage remuneration occurs when the remuneration offered is less than the agreed rate. In real estate transactions, the terms of commission and remuneration are often outlined in listing agreements or buyer representation agreements. If a buyer has committed to a specific rate of remuneration in their agreement and the brokerage or seller offers a lower amount, the buyer could potentially be held responsible for making up the difference to satisfy the terms of their agreement. This ensures that brokers receive the fair compensation they are entitled to for their services, particularly if they have entered into a contractual obligation that stipulates a higher remuneration. In this context, the other options do not create a binding obligation for the buyer to pay the brokerage remuneration. For instance, if the seller agrees to cover the brokerage fee, the buyer would typically not be liable for that cost. Similarly, if the terms of the agreement state that certain fees will be covered by the seller, it does not place liability on the buyer. If the seller does not offer payment to the cooperating brokerage but no prior agreement specified buyer liability, that does not automatically result in the buyer having to pay either. Therefore, the scenario outlined in the correct choice accurately captures the circumstances under which buyer liability for brokerage remuneration arises.