Humber/Ontario Real Estate Course 4 Exam Practice

What must a brokerage do if a buyer discovers deficiencies after closing?

1. Pay for repairs unconditionally.

2. Refer buyer to a legal expert.

3. Review the terms of the agreement of purchase and sale.

4. Opt in to arbitration for resolving the issue.

5. Seek compensation from the seller on behalf of the buyer.

The correct answer is: Review the terms of the agreement of purchase and sale.

In the context of real estate transactions, when a buyer discovers deficiencies after closing, the most appropriate action for a brokerage is to review the terms of the agreement of purchase and sale. This document outlines the rights and responsibilities of both the buyer and seller, including warranties, conditions, and any disclosures related to the property's condition. By closely examining this agreement, the brokerage can determine the potential remedies available to the buyer based on the specific language outlined in the contract. This action helps in ensuring that the buyer is fully informed about any obligations that the seller may have had prior to closing, as well as outlining any limitations on claims that may exist. It also lays the groundwork for whether further steps, such as seeking legal advice or pursuing compensation from the seller, are warranted based on the contract's stipulations. Simply referring the buyer to a legal expert or opting for arbitration would not provide immediate clarity on the available options under the contractual terms. Additionally, paying for repairs unconditionally would not be a standard course of action, nor would seeking compensation from the seller without first reviewing the agreement. Thus, reviewing the agreement of purchase and sale is the foundational step necessary for addressing any post-closing issues effectively.