Humber/Ontario Real Estate Course 1 Exam Practice

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What does the term "caveat emptor" relate to in real estate transactions?

Seller's legal duty to disclose defects
Buyer's responsibility to inspect the property
Requirement for a property appraisal
Need for a real estate attorney

The correct answer is: Buyer's responsibility to inspect the property

"Caveat emptor" means "let the buyer beware" in Latin. In real estate transactions, this term relates to the buyer's responsibility to inspect the property thoroughly before purchasing it. It implies that the buyer should conduct inspections, ask questions, and do their due diligence to uncover any potential issues or defects with the property. This principle emphasizes the importance of buyers taking an active role in ensuring they are making an informed decision before finalizing the purchase. Option A is incorrect as it refers to the seller's legal duty to disclose defects, which is covered by laws such as the Real Estate and Business Brokers Act. Option C is incorrect because while a property appraisal may be part of the process, it is not specifically what "caveat emptor" relates to. Option D is incorrect as having a real estate attorney is recommended but not directly related to the concept of "caveat emptor."