Humber/Ontario Real Estate Course 2 Exam Practice

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Prepare for the Ontario Real Estate Exam with our comprehensive Humber Course 2 Exam Practice quiz. Engage with multiple choice questions and detailed explanations, designed to help you excel.

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Salesperson Johnson reduces his commission by $5,000 to secure his offer's acceptance without informing the co-operating brokerage or the other buyer. What ethical consideration applies here?

Salesperson Johnson is protecting both his interests and that of the seller's.
Salesperson Johnson has an ethical obligation under the Code of Ethics (Sec. 25) to disclose remuneration terms to other persons making offers, if such terms affect whether an offer is accepted.
Salesperson Johnson is correct by not informing the co-operating brokerage or the other buyer, as he is only required to disclose the existence of competing offers and not the substance of such offers (including remuneration).
Salesperson Johnson is not obligated to present the second offer, as his amended offer provides the highest net to the seller.
Salesperson Johnson should inform the seller only but keep the changes confidential from others.
Salesperson Johnson cannot change his commission once an offer is made.

The correct answer is: Salesperson Johnson has an ethical obligation under the Code of Ethics (Sec. 25) to disclose remuneration terms to other persons making offers, if such terms affect whether an offer is accepted.

In this scenario, the correct ethical consideration that applies is option B. According to the Code of Ethics (Sec. 25), a real estate salesperson has an ethical obligation to disclose remuneration terms to other persons making offers if such terms have the potential to affect whether an offer is accepted. By reducing his commission by $5,000 without informing the co-operating brokerage or the other buyer, Salesperson Johnson is not fulfilling this ethical obligation to disclose the relevant information regarding the remuneration terms of the offer he is presenting. Options A, C, D, E, and F are not the correct answers because they do not address the specific ethical consideration of disclosing remuneration terms to other parties involved in the transaction. It is important for real estate professionals to adhere to ethical standards and disclose information that could potentially impact the acceptance or rejection of an offer.