Humber/Ontario Real Estate Course 4 Exam Practice

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What should Salesperson Budd do upon discovering potential water damage while preparing a listing?

  1. The seller claims that this is an insignificant matter.

  2. Inform the seller of potential liability if the issue is not disclosed to potential buyers.

  3. No further action is required as such issues are common in the area.

  4. Decline to list the property due to the possible structural issue.

  5. Inform the prospective buyers directly about the water damage.

  6. Advise the seller to seek a professional inspection.

The correct answer is: Inform the seller of potential liability if the issue is not disclosed to potential buyers.

Upon discovering potential water damage while preparing a listing, it is crucial for Salesperson Budd to inform the seller of potential liability if the issue is not disclosed to prospective buyers. This is essential because, in real estate transactions, sellers have a legal obligation to disclose known defects or issues that may affect the value or use of the property. Failing to disclose such information can lead to legal repercussions for the seller, including possible lawsuits from buyers if they discover the damage after the sale has closed. By communicating the importance of full disclosure, Budd not only protects the seller from potential liability but also upholds ethical standards in the real estate profession. This action facilitates transparency in the transaction, allowing buyers to make informed decisions while also safeguarding the integrity of the listing process. In this scenario, it's essential to prioritize the legal requirements surrounding property disclosure to ensure both the seller and the agents are compliant with regulations and ethical practices in real estate.

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