Ontario Real Estate Licensing Exam Practice · Question
What is the primary purpose of a 'financing condition' in an Agreement of Purchase and Sale for a residential home in Ontario?
A financing condition is included to protect the buyer, allowing them a specific period to obtain satisfactory mortgage financing. If they cannot secure financi
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Question: What is the primary purpose of a 'financing condition' in an Agreement of Purchase and Sale for a residential home in Ontario?
Answer options:
- To allow the buyer to change their mind about the purchase
- To ensure the seller receives their desired closing date ✅ To give the buyer time to secure a mortgage to purchase the property
- To permit the buyer to negotiate a lower purchase price after signing
Correct answer: To give the buyer time to secure a mortgage to purchase the property
Explanation: A financing condition is included to protect the buyer, allowing them a specific period to obtain satisfactory mortgage financing. If they cannot secure financing within this period, they may terminate the agreement without penalty.
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