Humber/Ontario Real Estate Course 3 Exam Practice

What is inherent about multiple representation in real estate transactions?

1. Has inherent risks given the competing interests of buyer and seller.

2. Is legally very straightforward.

3. Effectively eliminates the competitive nature of buyer and seller negotiations.

4. Can only involve the same salesperson working with both buyer and seller clients in the same transaction.

5. Guarantees higher satisfaction for all parties involved.

6. Must be avoided to prevent conflicts of interest.

The correct answer is: Has inherent risks given the competing interests of buyer and seller.

Multiple representation in real estate transactions carries inherent risks due to the competing interests of the buyer and seller. When a real estate professional represents both parties in a transaction, there is a potential for conflicts to arise because each party has different goals and needs. The buyer typically seeks to purchase the property for the lowest possible price, while the seller aims to achieve the highest possible price. This fundamental disparity can lead to challenges in communication and expectations, making it difficult for the representative to navigate the interests of both parties simultaneously. In such scenarios, the real estate professional must exercise great caution to ensure that both the buyer and seller are treated fairly and that their respective interests are acknowledged. This can require careful balancing acts and transparency in disclosing any information that could impact negotiations. As a result, the nature of multiple representation necessitates an understanding of these risks and challenges, highlighting the complexities involved in managing such transactions effectively.