Humber/Ontario Real Estate Course 4 Exam Practice

If an escape clause is included in a property sale agreement, what is typically permitted?

1. Buyer to back out if financing isn't secured.

2. Buyer to have unlimited access for inspections.

3. Seller to continue to market the property while holding a conditional offer.

4. Seller to renegotiate the sale price without buyer consent.

5. Buyer to have unconditional rights post-offer acceptance.

6. Seller to offer the property exclusively through another channel.

The correct answer is: Seller to continue to market the property while holding a conditional offer.

The inclusion of an escape clause in a property sale agreement typically allows the seller to continue marketing the property while a conditional offer is in place. This type of clause is important because it gives the seller the flexibility to consider other offers or to potentially sell the property to another buyer if certain conditions are not met within a specified timeframe. It protects the seller from being locked into a deal if the buyer fails to fulfill the agreed-upon conditions, such as securing financing or completing inspections. This practice is common in real estate transactions and ensures that sellers are not at a disadvantage if they receive a more favorable offer while still negotiating or finalizing terms with an initial buyer. Other scenarios outlined in the choices do not accurately reflect the intent or function of an escape clause, emphasizing how it specifically pertains to the seller's ability to keep options open rather than limiting their actions or extending rights to the buyer post-offer acceptance.