Humber/Ontario Real Estate Course 2 Exam Practice

What occurs if Salesperson Tyler's client is interested in a property listed by Salesperson Edward, and both work for the same brokerage?

1. Salesperson Tyler and Salesperson Edward must cease representing the buyer and seller, respectively.

2. A conflict of interest arises because the brokerage represents both the buyer and the seller.

3. No conflict arises as both Salesperson Tyler and Salesperson Edward can represent their clients' best interests.

4. The brokerage must appoint a different salesperson to avoid a conflict of interest.

5. No conflict occurs as long as both salespersons are independent contractors.

6. The buyer must terminate the client relationship and become a customer.

The correct answer is: A conflict of interest arises because the brokerage represents both the buyer and the seller.

In this scenario, the correct answer is that a conflict of interest arises because the brokerage represents both the buyer and the seller. This situation creates a potential conflict because the brokerage, through its salespeople Tyler and Edward, is representing both sides of the transaction. When a brokerage represents both the buyer and the seller in a real estate transaction, there is a risk that one party's interests may not be fully protected, as the brokerage and its agents have a duty of loyalty to act in the best interests of their respective clients. Options A, C, D, E, and F are not correct in this situation because they do not address the conflict of interest that arises when the same brokerage represents both the buyer and the seller. It is crucial to recognize and manage conflicts of interest in real estate transactions to ensure that all parties are treated fairly and ethically. Therefore, in this case, the correct answer is that a conflict of interest arises because the brokerage represents both the buyer and the seller.