Humber/Ontario Real Estate Course 2 Exam Practice

Which statement is true regarding the deposit in an agreement of purchase and sale?

1. The deposit can consist of both a single amount or multiple installments paid over a period of time

2. The deposit must be held by either the listing brokerage

3. The deposit must be held by the listing brokerage in all cases

4. The deposit is protected by a warranty corporation

5. The deposit must be held in a trust account

6. The deposit cannot be partially paid

The correct answer is: The deposit can consist of both a single amount or multiple installments paid over a period of time

In this case, the correct answer is A. The statement is true because the deposit in an agreement of purchase and sale can indeed consist of either a single amount or multiple installments paid over a period of time. This flexibility allows for negotiations between the buyer and seller on how the deposit will be structured. Regarding the incorrect options: B. The deposit is not necessarily required to be held by the listing brokerage; it can be held by a real estate brokerage representing the buyer as well. C. While it is common practice for the deposit to be held by the listing brokerage, it is not a strict requirement in all cases. D. The deposit is not protected by a warranty corporation; it is typically held by a brokerage in trust. E. The deposit must be held in a trust account, not necessarily by the listing brokerage. F. The deposit can indeed be partially paid, depending on the agreed terms between the buyer and the seller.