Humber/Ontario Real Estate Course 2 Exam Practice

What is an accurate statement about contingencies within the purchase and sale agreement?

1. They are typically standard and not personalized.

2. They can be tailored to meet the buyer's needs.

3. They generally expedite the selling process.

4. They decrease a buyer's protection.

5. They are found in commercial transactions only.

6. They are unnecessary in most agreements.

The correct answer is: They can be tailored to meet the buyer's needs.

Contingencies within a purchase and sale agreement are clauses that allow a party to back out of the contract under certain circumstances without facing penalties. The correct statement is that they can be tailored to meet the buyer's needs. This option is accurate because contingencies are often included in real estate contracts to protect the buyer's interests by allowing for specific conditions that must be met for the sale to proceed. Buyers can customize contingencies based on their unique requirements, such as obtaining financing, completing inspections, or selling their current home before closing the deal. The other options are not accurate: A. They are typically standard and not personalized: Contingencies are often customized to fit the specific needs of the buyer or seller. C. They generally expedite the selling process: Contingencies can sometimes slow down the selling process as they may require additional time to fulfill certain conditions. D. They decrease a buyer's protection: Contingencies actually increase a buyer's protection by allowing them to back out of the contract under certain circumstances. E. They are found in commercial transactions only: Contingencies are commonly used in both residential and commercial real estate transactions. F. They are unnecessary in most agreements: Contingencies are important in many real estate agreements to protect the interests of both buyers and sellers.