Humber/Ontario Real Estate Course 4 Exam Practice

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Prepare for the Humber Real Estate Course 4 Exam with a comprehensive quiz designed to test your knowledge through flashcards and multiple-choice questions. Enhance your understanding and boost your confidence before taking the exam!

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If a buyer wants to terminate an agreement because they can't arrange financing, which is correct?

The buyer and seller sign a notice of termination to authorize the return of the deposit
The buyer must sign a notice of termination to return the deposit
A mutual release is required to return the deposit
The buyer should waive the financing condition to release the deposit
The seller must sign a financing waiver
The buyer must waive the termination clause

The correct answer is: A mutual release is required to return the deposit

When a buyer wants to terminate an agreement due to an inability to arrange financing, a mutual release is indeed required to return the deposit. This is because a mutual release signifies that both parties—buyer and seller—agree to cancel the agreement and release each other from any obligations stemming from it. The mutual release serves to formally conclude the transaction and ensures that the deposit can be returned to the buyer, as both parties acknowledge that the agreement is no longer valid due to the buyer's financing issues. In this situation, it is essential for both the buyer and seller to confirm that the cancellation is mutual, which helps prevent any future disputes regarding the deposit or the reasons for termination. This process reinforces the principle of contract law where both parties must consent to end the contract and ensures clarity moving forward.