OACETT: REAL ESTATE - COURSE 2
MODUL 15 EXAM QUESTIONS AND
ANSWERS.
When a buyer submits a deposit with an agreement of purchase and sale, it: - Answer
ultimately forms part of the downpayment. Correct. At point of sale completion, the deposit
forms part of the funds used to close the transaction.
Which of the following statements is correct about negotiations and deposits? - Answer A
substantial deposit adds credibility to the negotiations. > Correct. A large deposit is a positive
factor in the negotiating process.
Assume a buyer customer asks whether or not HST is payable on a purchase and the
salesperson informs the customer that it does not apply. Subsequently, the buyer discovers that
the property has attracted HST which is then payable. In this situation the salesperson: - Answer
and the employing brokerage, may be found negligent if the buyer takes legal action. Correct. A
person possessing special skills owes a duty of care to both clients and customers. In the case of
customers, it is more limited than with clients but would still involve providing correct
information.
The lawyer for the buyer files an objection with the seller's lawyer during the requisition period
arguing that the title is not valid given that a previous severance of the property was not
completed in accordance with the Planning Act. This is best described as: - Answer a root of
title objection. > Correct. The objection is fundamental to the validity of title. In other words, it
goes to the root of the title; i.e., the beginning of the title.
Tendering: - Answer involves the unconditional offer of a buyer or seller to perform his or
her part of an agreement. Correct. By demonstrating the intent to perform, either party (buyer
or seller) is then in a position to seek remedies under breach of contract should the other party
not close.
Tendering demonstrates that a party is ready, willing and able to complete the transaction.
Various individuals, who are not owners, can be authorized to sign an agreement of purchase
and sale on behalf of a current or future owner. Which of the following is NOT one of them? -
Answer A spouse. Correct. A spouse, as a non-owner, cannot sign on behalf of the other
spouse. A owner spouse does, however, have rights pursuant to the Family Law Act if the
property being transacted is a matrimonial home. As such, he or she must give informed
consent the transaction.
Buyer Murphy signs an agreement of purchase and sale to buy a residential property. He
inspected the property prior to submitting his offer, but did not request a pre-closing inspection.
After taking possession, he discovers water damage which the seller tried to clean up, but water
, staining and a musty smell are evident. Which of the following statements is correct? - Answer
The seller may have granted Buyer Murphy access to the property before closing, but was not
obligated to do so.
Correct. Nothing in the agreement provides for a pre-closing inspection, unless the parties have
agreed otherwise.
When a buyer submits a deposit, the deposit clause in the agreement of purchase and sale: -
Answer requires that a deposit, submitted upon acceptance, must be delivered within 24
hours of acceptance.-* Correct. The 24-hour rule only applies to an 'upon acceptance'
arrangement and not other options; i.e., 'herewith' or 'as otherwise described in the
agreement.'
A brokerage working with a customer who signs an agreement of purchase and sale: - Answer
cannot receive notices relating to offers, as he or she is not represented by the brokerage. >
Correct. The ability to receive notices is based on an agency relationship. See the Notices clause
in the agreement of purchase and sale.
Salesperson Withers is reviewing an offer with Buyer Jenkins. Jenkins asks: "What is the
generally recognized guideline when selecting a length of time to search title?" Which of the
following best answers that question? - Answer The time to search the title should not
expire before all conditions are waived or fulfilled, while still providing an adequate time period
prior to the completion date.
Correct. The time to search title (i.e., the Requisition Date) should extend beyond all conditions
being waived or fulfilled.
Buyer Symanski is preparing an offer on Seller Sundberg's property for $329,900. Symanski will
be submitting a deposit of $20,000 and the seller will be taking back a first mortgage for
$200,000. Ba: on this information, the pay the balance as follows line on Schedule A will be: -
Answer $109,900
Lawyer Michelson is representing the buyer and informs the seller's lawyer in writing of a valid
objection to the seller's title. Apparently, the small subdivision of eight properties in which the
seller's home is located has not met certain requirements of the Planning Act. Which of the
following is NOT correct regarding this objection based on the wording of the agreement of
purchase and sale? - Answer The seller has no option but to return the buyer's deposit, as
the sale is at an end. Correct. Other options are available. The seller's lawyer may be able to
resolve the matter successfully to the buyer's and his lawyer's satisfaction.
When preparing an agreement of purchase and sale for a buyer client, having that buyer sign
the agreement and receiving a deposit from that person, a salesperson: - Answer will need
MODUL 15 EXAM QUESTIONS AND
ANSWERS.
When a buyer submits a deposit with an agreement of purchase and sale, it: - Answer
ultimately forms part of the downpayment. Correct. At point of sale completion, the deposit
forms part of the funds used to close the transaction.
Which of the following statements is correct about negotiations and deposits? - Answer A
substantial deposit adds credibility to the negotiations. > Correct. A large deposit is a positive
factor in the negotiating process.
Assume a buyer customer asks whether or not HST is payable on a purchase and the
salesperson informs the customer that it does not apply. Subsequently, the buyer discovers that
the property has attracted HST which is then payable. In this situation the salesperson: - Answer
and the employing brokerage, may be found negligent if the buyer takes legal action. Correct. A
person possessing special skills owes a duty of care to both clients and customers. In the case of
customers, it is more limited than with clients but would still involve providing correct
information.
The lawyer for the buyer files an objection with the seller's lawyer during the requisition period
arguing that the title is not valid given that a previous severance of the property was not
completed in accordance with the Planning Act. This is best described as: - Answer a root of
title objection. > Correct. The objection is fundamental to the validity of title. In other words, it
goes to the root of the title; i.e., the beginning of the title.
Tendering: - Answer involves the unconditional offer of a buyer or seller to perform his or
her part of an agreement. Correct. By demonstrating the intent to perform, either party (buyer
or seller) is then in a position to seek remedies under breach of contract should the other party
not close.
Tendering demonstrates that a party is ready, willing and able to complete the transaction.
Various individuals, who are not owners, can be authorized to sign an agreement of purchase
and sale on behalf of a current or future owner. Which of the following is NOT one of them? -
Answer A spouse. Correct. A spouse, as a non-owner, cannot sign on behalf of the other
spouse. A owner spouse does, however, have rights pursuant to the Family Law Act if the
property being transacted is a matrimonial home. As such, he or she must give informed
consent the transaction.
Buyer Murphy signs an agreement of purchase and sale to buy a residential property. He
inspected the property prior to submitting his offer, but did not request a pre-closing inspection.
After taking possession, he discovers water damage which the seller tried to clean up, but water
, staining and a musty smell are evident. Which of the following statements is correct? - Answer
The seller may have granted Buyer Murphy access to the property before closing, but was not
obligated to do so.
Correct. Nothing in the agreement provides for a pre-closing inspection, unless the parties have
agreed otherwise.
When a buyer submits a deposit, the deposit clause in the agreement of purchase and sale: -
Answer requires that a deposit, submitted upon acceptance, must be delivered within 24
hours of acceptance.-* Correct. The 24-hour rule only applies to an 'upon acceptance'
arrangement and not other options; i.e., 'herewith' or 'as otherwise described in the
agreement.'
A brokerage working with a customer who signs an agreement of purchase and sale: - Answer
cannot receive notices relating to offers, as he or she is not represented by the brokerage. >
Correct. The ability to receive notices is based on an agency relationship. See the Notices clause
in the agreement of purchase and sale.
Salesperson Withers is reviewing an offer with Buyer Jenkins. Jenkins asks: "What is the
generally recognized guideline when selecting a length of time to search title?" Which of the
following best answers that question? - Answer The time to search the title should not
expire before all conditions are waived or fulfilled, while still providing an adequate time period
prior to the completion date.
Correct. The time to search title (i.e., the Requisition Date) should extend beyond all conditions
being waived or fulfilled.
Buyer Symanski is preparing an offer on Seller Sundberg's property for $329,900. Symanski will
be submitting a deposit of $20,000 and the seller will be taking back a first mortgage for
$200,000. Ba: on this information, the pay the balance as follows line on Schedule A will be: -
Answer $109,900
Lawyer Michelson is representing the buyer and informs the seller's lawyer in writing of a valid
objection to the seller's title. Apparently, the small subdivision of eight properties in which the
seller's home is located has not met certain requirements of the Planning Act. Which of the
following is NOT correct regarding this objection based on the wording of the agreement of
purchase and sale? - Answer The seller has no option but to return the buyer's deposit, as
the sale is at an end. Correct. Other options are available. The seller's lawyer may be able to
resolve the matter successfully to the buyer's and his lawyer's satisfaction.
When preparing an agreement of purchase and sale for a buyer client, having that buyer sign
the agreement and receiving a deposit from that person, a salesperson: - Answer will need
