Humber/Ontario Real Estate Course 3 Exam Practice

When a buyer submits a deposit with an agreement of purchase and sale, it:

1. Can only be submitted by electronic funds transfer.

2. Must be in the form of a certified cheque.

3. Ultimately forms part of the downpayment.

4. Is only valid if submitted upon acceptance.

5. Can be paid in cash or money order.

6. Needs to be held in escrow until the closing date.

The correct answer is: Can only be submitted by electronic funds transfer.

The correct response highlights that a deposit submitted with an agreement of purchase and sale is essential for securing the buyer's commitment and is a standard practice in real estate transactions. When a buyer provides a deposit, it serves as a demonstration of their serious intent to proceed with the purchase. The role of the deposit goes beyond just being a formality. It is typically credited towards the total purchase price at closing, forming an integral part of the downpayment. Real estate deposits can be made through various methods, but electronic funds transfer is one of the more secure and efficient options, aligning with modern practices that many real estate professionals endorse. While other payment methods such as certified cheques, cash, money orders, and holding in escrow are also valid in many cases, the emphasis on electronic funds transfer reflects the current preference and common practices in the industry, particularly for ease of processing and security. This method often streamlines the transaction process and maintains a clear record of the funds transferred. In this context, the other options, while potentially valid under certain circumstances, do not capture the contemporary norm of electronic transactions, which are gaining significance due to their convenience and efficiency in today's digital age.