Humber/Ontario Real Estate Course 3 Exam Practice

The deposit clause in an agreement of purchase and sale specifies that:

1. An electronic funds transfer can be used for deposits.

2. Deposits must be delivered within 24 hours upon acceptance.

3. Deposits must be placed in an interest-bearing account.

4. A cheque is the only acceptable form of deposit.

5. The deposit amount can be decided later.

6. A third-party trustee manages the deposit.

The correct answer is: Deposits must be delivered within 24 hours upon acceptance.

The deposit clause in an agreement of purchase and sale specifies that deposits must be delivered within 24 hours upon acceptance. This time frame is crucial as it ensures the seller that the buyer is committed to the transaction shortly after the agreement is executed. Timely payment of the deposit helps to solidify the agreement and can prevent potential disputes regarding the buyer's intent and the seriousness of their offer. Receiving the deposit promptly is standard practice in real estate transactions, reflecting the buyer's commitment to moving forward with the purchase. This requirement is also beneficial for the seller, as it provides some assurance that the transaction will proceed and enhances the overall integrity of the process. Options that involve electronic payments, interest-bearing accounts, or third-party management may be viable in some cases, but they do not represent the primary specification of the deposit clause. Similarly, stating that the deposit amount can be decided later or that a cheque is the only acceptable form of deposit does not accurately reflect the standard practices outlined in an agreement of purchase and sale.