Humber/Ontario Real Estate Course 4 Exam Practice

What must a buyer’s representation include in a conditional offer regarding a new first mortgage?

1. The offer cannot include any conditions related to mortgage.

2. Amortization period for that mortgage.

3. Minimum acceptable terms from the buyer’s perspective.

4. It must suggest the seller's favorable mortgage terms.

5. An explicitly stated waiver period.

6. The seller’s approval of the lender.

The correct answer is: Minimum acceptable terms from the buyer’s perspective.

A buyer’s representation in a conditional offer regarding a new first mortgage should include minimum acceptable terms from the buyer’s perspective. This ensures that the buyer communicates their specific needs and requirements related to financing, which helps to protect their interests in the transaction. By outlining these minimum terms, the buyer sets clear expectations for what they consider acceptable for a mortgage. This is essential for negotiating the offer and ensures that both parties are on the same page regarding financial arrangements. Including minimum acceptable terms helps streamline the negotiation process and prevents misunderstandings that could arise later in the transaction. It empowers the buyer to walk away from the deal if the mortgage terms offered do not meet their minimum requirements, thereby providing a degree of security during the purchase process. The other choices do not provide the same level of strategic advantage or protection for the buyer in a conditional offer. For instance, including the seller's favorable mortgage terms or the seller's approval of the lender may not align with the buyer's needs and would not assist in negotiating terms that are favorable to the buyer.