Residential Transactions Flashcards
6 cards from real OREA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Residential Transactions flashcards as text
In Ontario, what is a 'power of sale' listing and how does it differ from a regular listing?
Answer: A property being sold by the lender after the borrower defaults on their mortgage, sold 'as is' with the lender as seller
A power of sale listing is a property being sold by the mortgage lender after the borrower has defaulted. The lender sells the property 'as is' to recover the mortgage debt. The lender must obtain fair market value but is not obligated to accept the highest offer.
What is the 'Home Buyers' Plan' (HBP) and how does it help Ontario homebuyers?
Answer: A federal program allowing first-time homebuyers to withdraw funds from their RRSP tax-free to use as a down payment, which must be repaid over 15 years
The Home Buyers' Plan is a federal program that allows qualifying first-time homebuyers to withdraw up to a specified amount from their RRSPs without immediate tax consequences to use as a down payment. The withdrawn amount must be repaid to the RRSP within 15 years.
In Ontario, what is a 'Schedule' in an Agreement of Purchase and Sale?
Answer: An additional page attached to the standard agreement that contains extra terms, conditions, or details that supplement the main agreement
Schedules are additional pages attached to the standard OREA form that contain supplementary terms, conditions, or details. They form part of the agreement and are used when the standard form does not have enough space or when additional clauses are needed.
What is the 'buyer's obligation' regarding closing funds in Ontario?
Answer: The buyer must provide the balance of the purchase price (less the deposit) to their lawyer, typically by certified cheque or wire transfer, before the closing date
The buyer must arrange for the balance of the purchase price (purchase price minus the deposit and any adjustments) to be available to their lawyer before closing, typically through certified cheque or wire transfer. This ensures funds are guaranteed and available for closing.
In Ontario, what is the significance of 'insurance' during a residential real estate transaction?
Answer: The buyer must arrange property insurance before closing, and proof of insurance is typically required by the mortgage lender before funds are advanced
The buyer must arrange property insurance before closing. Mortgage lenders require proof of adequate insurance before advancing mortgage funds. The seller's insurance does not transfer — the buyer must obtain their own policy to protect against loss or damage.
What is the 'final walkthrough' or 'pre-closing visit' in an Ontario residential transaction?
Answer: An opportunity for the buyer to visit the property before closing to verify it is in the agreed-upon condition, that included chattels and fixtures are present, and that the property is vacant
The pre-closing visit allows the buyer to confirm that the property is in substantially the same condition as when the offer was made, that all agreed-upon chattels and fixtures are present, and that the seller has vacated. It is not a second inspection but a verification visit.