Humber/Ontario Real Estate Course 4 Exam Practice

When Salesperson Garcia receives three offers on a listed property, what must be disclosed to the potential buyers?

1. The existence of these offers without disclosing their substance.

2. The offer with the best terms must be presented first.

3. The offer drafted by the listing brokerage is presented first.

4. The existence and substance of competing offers must be disclosed.

5. Only the highest offer must be disclosed.

6. No disclosures are needed to any parties making offers.

The correct answer is: The existence of these offers without disclosing their substance.

The correct choice emphasizes the importance of transparency in real estate transactions. When there are multiple offers on a listed property, the agent must inform potential buyers about the existence of those offers. However, they are not required to share specific details regarding the offers, such as the price or terms, to protect the confidentiality of the sellers and the competing buyers. This practice upholds fair competition among buyers while ensuring that sellers have the advantage of negotiating from a position of strength without revealing too much. It's crucial for agents to maintain this balance between providing necessary information to stimulate interest and protecting their clients' interests. Other options suggest disclosing specific terms of the offers or prioritizing particular offers, which could compromise confidentiality and violate ethical standards. Additionally, declaring no need for disclosures fails to recognize the duty to ensure that all parties are adequately informed about the competitive landscape, which is essential for fostering a fair and ethical real estate environment.