Humber/Ontario Real Estate Course 3 Exam Practice

Multiple representation:

1. Is based on the legal assumption of shared confidences between brokerages; i.e., those brokerages share confidential information with one another.

2. Can only occur if both the listing salesperson representing the seller and the selling salesperson representing the buyer are working in the same branch of a multi-branch brokerage operation.

3. Is most accurately described as a relationship in which the brokerage represents two or more clients at the same time.

4. Can generate significant risk for a brokerage, as there is an inherent conflict of interest when the brokerage is simultaneously representing buyer client and a seller client in the same transaction.

5. Is always illegal and should be avoided under all circumstances.

6. Requires explicit written consent from all parties involved.

The correct answer is: Can generate significant risk for a brokerage, as there is an inherent conflict of interest when the brokerage is simultaneously representing buyer client and a seller client in the same transaction.

The concept of multiple representation is intrinsic to real estate transactions where a brokerage assists both a buyer and a seller in the same deal. The correct choice highlights that this scenario can pose significant risks to the brokerage, primarily due to the inherent conflict of interest. When a single brokerage represents both sides in a transaction, the expectation of impartiality can be compromised, leading to concerns about fairness and the duty of loyalty each party deserves. Conflicts can arise in various ways, such as how negotiations are handled, the communication of offers, and the inability to fully advocate for one client's interests without potentially undermining the other. As a result, brokers must navigate this landscape carefully to ensure compliance with legal and ethical standards. Regarding the context of the other options, the description of shared confidences among brokerages misrepresents how multiple representation operates, as it implies a level of information sharing that is typically restricted in these situations. Similarly, the option about representation within a single branch of a multi-branch brokerage inaccurately limits the scope of multiple representation; it can occur across different locations. The option emphasizing explicit written consent is notable but does not encapsulate the overarching issue of conflict inherent in representing both parties simultaneously. Lastly, the suggestion that multiple representation is always illegal is