Humber/Ontario Real Estate Course 1 Exam Practice

If a brokerage advertises "Commissions as low as 2%", what must the ad include?

1. Disclosure explaining when the lowest rate applies

2. No disclosure is necessary

3. Statement should include both percentage and dollar amount

4. Commission should be 2% for all transactions

5. Client testimonials on the commission rates

6. Example scenarios demonstrating the commission rate

The correct answer is: Disclosure explaining when the lowest rate applies

When a brokerage advertises "Commissions as low as 2%", it must include a disclosure explaining when the lowest rate applies to comply with regulatory requirements. This disclosure is crucial to ensure transparency and clarity for potential clients. It helps prevent misunderstandings and sets the right expectations regarding the circumstances under which the 2% rate would be applicable. Options B, C, D, E, and F are incorrect because they do not address the specific requirement of providing a disclosure explaining when the lowest rate of 2% applies. Without this disclosure, the advertisement may be considered misleading or deceptive, leading to potential issues for the brokerage in terms of compliance and client relations.