Showing Properties Practice Questions

Question 1 of 5

When should a salesperson recommend a buyer consult an insurance broker before completing a purchase?

• AInsurance consultation is never needed before closing — pre-purchase insurance consultation can prevent the buyer from purchasing a property they cannot insure at a reasonable cost
• BInsurance only needs to be arranged on the closing day, because discovering insurance problems on closing day can create a crisis
• CAn insurance broker should be consulted before waiving conditions when the property has characteristics that may affect insurability — such as older electrical systems, oil heating, prior claims, proximity to water, or heritage designation — to confirm coverage availability and estimated costs
• DAll properties are equally insurable and no pre-purchase consultation is needed — insurability and premiums vary significantly based on property characteristics

Question 2 of 5

What is the potential consequence of a salesperson deliberately inflating a CMA value to win a listing (known as 'buying a listing')?

• ANo consequence — it is standard practice to tell sellers what they want to hear real estate
• BThe property will always sell for the inflated price
• COverpricing leads to extended time on market, eventual price reductions that often result in a lower final sale price than proper initial pricing would have achieved, seller frustration, and potential complaints about the salesperson's competence
• DBuying listings is recommended by RECO

Question 3 of 5

When presenting a CMA to a seller, what is the MOST important thing the salesperson should avoid?

• APresenting too much data, noting that while data overload is undesirable, it is not the most important thing to avoid
• BPresenting a CMA that has been manipulated to justify a predetermined price rather than providing an honest evidence-based analysis — as this 'buying the listing' practice harms the seller and violates professional ethics
• CPresenting comparables from the same neighbourhood, as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate
• DUsing photographs in the presentation

Question 4 of 5

What is the role of online valuation tools (AVMs — Automated Valuation Models) in relation to a salesperson's CMA?

• AAVMs should replace CMAs entirely because they are computer-generated — avms lack the ability to assess condition, quality, and market nuances that a professional cma captures
• BAVMs provide a useful reference point but cannot replace a salesperson's CMA because they lack the ability to assess property condition, quality of renovations, micro-location factors, and current market nuances that professional judgment captures
• CAVMs are always more accurate than CMAs — avms and cmas have different strengths
• DSalespersons should never be aware of AVM values

Question 5 of 5

A comparable property sold with seller-paid closing costs of $10,000. How should this be handled in the CMA?

• AIgnore the concession because it is a private arrangement, noting that be accounted for
• BAdd $10,000 to the comparable's price because the seller was generous
• CAdjust the comparable's effective sale price downward by $10,000
• DThis information is never available and cannot be used in analysis