Humber Real Estate - Course 2, Module 4, Factors
Impacting Residential Real Estate Negotiations
(Questions and Answers)
What is the difference between a 'Patent Defect' and a 'Latent Defect'? - ✔️✔️A 'Patent Defect'
is observable by the untrained eye.
A 'Latent Defect' is not readily observable to the untrained eye during the reasonable
inspection of a property.
What is the most severe type of latent defect? - ✔️✔️A material latent defect because it poses a
serious risk that can render the home unsafe, unhealthy or otherwise uninhabitable to live it.
What are some sources of demographical information that a salesperson may access? - ✔️✔️-
Real estate boards
- Subscription-based databases (e.g. Geowarehouse) and Canadan Mortgage and Housing
Corporation (CMHC)
What are some examples of common material facts for a seller? - ✔️✔️- Credit report of the
buyer
- Zoning designation (e.g. bylaws, land use or fence height requirements)
- Proximity to schools or other public activities / amenities
- Dwelling measurements
- Recent neighbourhood property sales
- New developments
- Structural conditions and results (e.g. age, maintenance issues like roof leaks, foundation
damage, mechanical or electrical deficiencies, basement water seepage, mould or insect
infestations)
- Outdated materials that can be personally or environmentally hazardous (e.g. asbestos,
know-and-tube wiring, lead or Kitec plumbing or underground storage tanks)
- Building and/or dwelling measurements or lot size (e.g. discrepancies in measurements
cited in listings or specific measurements of a balcony)
- Previous use of a property (e.g. former illicit activity such as a grow-op, meth lab or
murder)
- Government limitations (e.g. HST, property taxes or any expropriation plans)
-P
What are some ways you can do your due diligence to protect a seller's best interests? - ✔️✔️-
Inspecting the property and asking the seller questions that would reveal defects and material
facts that should be disclosed
- Documenting information shared with and by the seller with back-up copies stored in a
second location
- Protecting the seller's personal information and motivations for selling unless you have
written consent to share specific information
- Verifying that the information included in the listing or any advertising/promotional
materials is accurate
- Excluding any detail about a home that you cannot verify from the listing or adding a
qualifying statement or disclaimer
- Ensuring that you fully explain the content of all documents that you ask the seller to sign,
and making sure that they have received copies in a timely fashion
Is seller disclosure required for a patent defect? - ✔️✔️No, because it's readily visible upon
reasonable inspection.
Note: A good way to to remember this term ... think "It's PATENTLY clear that there is a hole
in this wall!"
What does 'Caveat Emptor' mean? - ✔️✔️Buyer beware
What type of defect are the following examples of?
- A missing railing
- Visible cracks in a foundation wall
- Evidence of mould
- Water stains on the ceiling
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