Humber/Ontario Real Estate Course 4 Exam Practice

A seller's property is believed to have more living space than actually exists. The salesperson discovers this error. This discrepancy is considered:

1. A patent defect

2. A latent defect

3. A material fact for the transaction

4. Non-material as it is a minor detail

5. An estimation variance

6. A standard market condition

The correct answer is: A material fact for the transaction

The scenario presented involves a significant discrepancy regarding the living space of a property, which is a critical factor in evaluating the property's value and suitability for potential buyers. This discrepancy is classified as a material fact for the transaction because it directly affects the buyer's decision-making process and influences the overall market value of the property. When a salesperson discovers that the actual living space is less than what is believed, it is crucial for that information to be disclosed to potential buyers. Material facts are information that could affect a buyer's interest in or price offered for a property. In real estate transactions, a material fact can include anything that significantly impacts the property’s desirability or value. While other terms like patent defects and latent defects refer to issues with the physical condition of the property itself, the discrepancy about living space is related to the factual representation of the property rather than a hidden issue or one difficult to detect. Calling it minor or non-material overlooks its potential importance to buyers, who may have specific requirements for square footage. Estimation variance and standard market conditions do not apply since they do not convey the significance of the information pertaining to the property itself. In summary, the classification of this discrepancy as a material fact underscores its importance in the real estate transaction and the ethical duty