Humber/Ontario Real Estate Course 3 Exam Practice

Which of the following accurately describes the duty owed by a sales representative to a client versus a customer?

1. Clients are entitled to honesty, while customers receive fiduciary duty.

2. Clients receive fiduciary duties, whereas customers are treated fairly and honestly.

3. Both clients and customers are treated equally with fiduciary duties.

4. Customers can negotiate client-level services for additional fees.

5. Only clients are entitled to fair and honest treatment.

6. Representatives owe no duty to any customers.

The correct answer is: Clients receive fiduciary duties, whereas customers are treated fairly and honestly.

The correct answer reflects the nature of the relationship between a sales representative and their clients compared to their customers. In real estate, a client is someone who has entered into a formal agency relationship with the sales representative, which obligates the representative to provide fiduciary duties to their client. These duties include loyalty, full disclosure, confidentiality, and accounting for all funds. This level of responsibility ensures that the client’s interests are prioritized, which is pivotal in creating trust and professionalism in the real estate transaction process. On the other hand, while customers do not have the same level of relationship as clients, they still deserve to be treated fairly and honestly. The representative must provide truthful and accurate information to customers, but there is no fiduciary duty. This distinction helps to clarify that while a sales representative has an elevated level of responsibility toward a client, fairness and honesty are still essential principles when interacting with customers. The other options do not accurately represent these relationships. The focus on fiduciary duties, the nature of treatment required, and the professional ethics involved in differentiating between clients and customers emphasize the necessity of understanding these roles in real estate practice. Understanding these distinctions can greatly impact how a sales representative manages their responsibilities and relationships in various transactions.