Ontario Real Estate Licensing Exam Practice · Question
Which of the following best describes the deposit in a real estate transaction in Ontario?
The deposit is an essential part of an Agreement of Purchase and Sale, acting as a tangible demonstration of the buyer's good faith and commitment to complete t
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Question: Which of the following best describes the deposit in a real estate transaction in Ontario?
Answer options:
- It is always refundable regardless of the buyer's actions. ✅ It is a partial payment of the purchase price and demonstrates the buyer's serious intent.
- It serves primarily as compensation for the seller's real estate agent.
- It is only required for commercial property transactions.
Correct answer: It is a partial payment of the purchase price and demonstrates the buyer's serious intent.
Explanation: The deposit is an essential part of an Agreement of Purchase and Sale, acting as a tangible demonstration of the buyer's good faith and commitment to complete the transaction. It forms part of the purchase price upon closing.
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