Humber/Ontario Real Estate Course 3 Exam Practice

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Which of the following options describes the role of a multiple representation transaction in real estate?

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

  2. Is legally straightforward with minimal complications.

  3. Eliminates competition between buyer and seller negotiations.

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

  5. Involves exclusive representation of one party only.

  6. Requires each party to sign a dual agency agreement.

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

The role of a multiple representation transaction in real estate relates to the inherent risks that arise from the competing interests of both the buyer and the seller. In a multiple representation scenario, a real estate professional represents both parties in the same transaction, which can lead to potential conflicts of interest. The interests of buyers and sellers often differ significantly; for example, a buyer seeks to purchase a property at the lowest possible price, while a seller typically aims to sell at the highest possible price. This dynamic can challenge the agent's ability to maintain impartiality and provide equal advocacy for both parties, creating a situation rife with possible misunderstandings, miscommunications, or perceived inequities. Because of these competing interests, the agent must navigate carefully to ensure that both parties feel fairly represented, which ultimately raises the complexity and risk associated with the transaction. The other options do not accurately reflect the essence of multiple representation transactions. They either downplay the complexity involved, incorrectly present the nature of agent representation, or imply conditions that are not universally applicable. Therefore, acknowledging the inherent risks due to competing interests accurately captures the challenges and responsibilities inherent in multiple representation scenarios in real estate.

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