Humber/Ontario Real Estate Course 4 Exam Practice

If buyer Ava's offer is accepted but she later fails to fulfill the financing condition, what can the seller do?

1. Initiate a lawsuit against Ava

2. Void the agreement due to non-fulfillment of conditions

3. Renegotiate the purchase price

4. Force Ava to secure finance from a different lender

5. Demand immediate payment in full

6. Force the completion of sale through arbitration

The correct answer is: Void the agreement due to non-fulfillment of conditions

When a buyer's offer is accepted with a financing condition, it means that the sale is contingent upon the buyer securing financing by a specified date. If Ava fails to fulfill this condition, the seller has the right to void the agreement. This is because the financing condition is a critical component that allows the buyer to withdraw from the contract without penalty if financing is not obtained. In this scenario, the seller is not obligated to pursue further options such as initiating a lawsuit, demanding immediate payment, or renegotiating prices, as the non-fulfillment of the financing condition gives the seller a clear path to void the agreement without needing to take drastic measures. The focus is on the preservation of the terms agreed upon, and if one critical term (the financing condition) is not met, it effectively nullifies the contract. The seller can then look for other buyers or options without being bound to Ava's offer.