A licensee in BC wishes to purchase a property listed by their own brokerage. Under RESA, what disclosure obligation applies?

Q: What is the correct answer to: A licensee in BC wishes to purchase a property listed by their own brokerage. Under RESA, what disclosure obligation applies?

The correct answer is The licensee must disclose their status as a licensee in writing to the seller before making an offer. Option B is correct because under RESA, a licensee must disclose in writing to all parties that they are a licensed real estate professional when they have a direct or indirect interest in a transaction. This disclosure must be made before an offer is submitted, ensuring the seller knows the buyer's professional status and can make an informed decision about the offer.

Q: What background knowledge is needed for this Agency & Professional Ethics question?

RESA's disclosure requirements for licensee interests serve a critical transparency function. Licensees have professional knowledge and market insights that give them advantages in transactions. When a licensee is buying property, the seller deserves to know this so they can assess whether the offer reflects fair market value and whether the licensee may have used their professional position to gain an advantage. The written disclosure must be made before the offer is submitted.

Q: What is a good way to remember the answer to this Agency & Professional Ethics question?

Remember BOD: Before Offer, Disclose. If you are a licensee with any interest in a transaction, you must disclose in writing BEFORE submitting an offer. Not during, not after — BEFORE. If the exam asks about timing of licensee disclosure when purchasing property, the answer is always BEFORE the offer is submitted. Any answer suggesting disclosure after acceptance or no disclosure at all is wrong.

Q: What exam tip applies to this Agency & Professional Ethics question?

Two key elements: (1) disclosure must be IN WRITING, and (2) it must be BEFORE the offer is submitted. Both the format (written) and timing (pre-offer) must be correct for the answer to be right.

Q: How does this Agency & Professional Ethics concept apply in real world practice?

A licensee working at a brokerage in North Vancouver finds a property listed by their own brokerage that they want to purchase for personal investment. Before submitting their offer, they provide the seller with a written disclosure stating: 'I am a licensed real estate professional registered with [Brokerage Name]. I am purchasing this property for my personal investment.' The managing broker is also informed of the situation.

Question

Agency & Professional EthicsBCMEDIUM

A licensee in BC wishes to purchase a property listed by their own brokerage. Under RESA, what disclosure obligation applies?

Answer Options

A

No disclosure is required if the licensee uses a different name

B

The licensee must disclose their status as a licensee in writing to the seller before making an offer

C

The licensee need only disclose after the offer is accepted

D

Disclosure is only required if the licensee is the listing agent