Humber/Ontario Real Estate Course 4 Exam Practice

A condition in an offer allows a buyer 120 days to sell their existing property. What happens if the buyer fails to do so?

1. The agreement remains valid despite the unmet condition

2. Seller may pursue legal action for damages due to market depreciation

3. The buyer can unilaterally extend the condition period

4. The agreement becomes binding regardless of the sale

5. The buyer must sell the property at any cost

6. The agreement becomes immediately void

The correct answer is: Seller may pursue legal action for damages due to market depreciation

In the context of real estate transactions, a condition in an offer, such as a buyer needing to sell their existing property within a specified timeframe, serves as a contingency that must be fulfilled for the agreement to proceed. If the buyer fails to sell their property within the 120 days specified, it is essential to understand that the condition is not met. When a buyer is unable to sell their property, this fundamentally affects the validity of the agreement. Typically, if a significant condition is unmet and not satisfied, the seller can take steps to pursue damages that may have arisen from this situation, which could include loss of market opportunity or other consequential losses. This is what makes the option suggesting that the seller may pursue legal action for damages due to market depreciation understandable, as it reflects the legal recourse available to a seller in such a scenario. In contrast, the other options do not accurately reflect the outcomes of an unmet condition in real estate transactions. For instance, the agreement cannot simply remain valid or become binding if the buyer has not fulfilled their obligation to sell their existing property, and unilateral extensions or mandatory sales at any cost do not apply in this situation. Thus, the choice regarding the seller's potential legal recourse is the most relevant in this context.