Humber/Ontario Real Estate Course 4 Exam Practice

A real estate transaction is flagged as suspicious. Which factors did the agent consider?

1. Significant cash possession by client

2. Transaction involving $10,000 or more

3. Presence of terrorism involvement

4. Reasonable grounds derived from thorough analysis

5. Client's foreign transactions history

6. Property price significantly below market value

The correct answer is: Reasonable grounds derived from thorough analysis

Thorough analysis of a transaction, which provides reasonable grounds for suspicion, plays a crucial role in identifying potentially fraudulent or illicit activities in real estate. When agents conduct a comprehensive review of various details and patterns, they can better assess if a transaction is out of the ordinary or has characteristics often associated with money laundering or other illegal activities. In this context, reasonable grounds derived from thorough analysis means that the agent has carefully considered multiple factors and data points related to the transaction, rather than relying solely on one element or a gut feeling. This process often involves examining client behaviors, transaction amounts, property values, and other contextual elements. By ensuring that their suspicion stems from a well-reasoned analysis, agents fulfill their fiduciary duty to protect the integrity of the real estate market and comply with legal and regulatory standards. The other options provided, while they may contribute to an agent’s awareness, are typically not sufficient on their own to determine if a transaction is suspicious without the context that thorough analysis provides. For example, significant cash possession or previous foreign transactions may raise eyebrows, but without comprehensive evaluation and context-driven reasoning, they do not automatically necessitate further scrutiny. Similarly, transaction amounts above certain thresholds or pricing significantly below market value can be risky signs, but again