Humber/Ontario Real Estate Course 4 Exam Practice

Which of the following statements is correct according to the agreement of purchase and sale regarding who bears costs associated with mortgages taken back?

1. The buyer is responsible for deed preparation.

2. The buyer is responsible for land transfer tax.

3. The buyer is responsible for costs associated with any mortgages taken back by the seller.

4. The seller is responsible for costs associated with any mortgage taken back.

5. The seller is responsible for deed preparation.

6. The seller is responsible for land transfer tax.

The correct answer is: The buyer is responsible for costs associated with any mortgages taken back by the seller.

The correct answer highlights that, in the context of an agreement of purchase and sale, the buyer is typically responsible for costs associated with any mortgages taken back by the seller. This is consistent with real estate practices, where the buyer is often tasked with handling the financial obligations related to property financing, including the costs that arise from these mortgages. When a seller takes back a mortgage, it usually means that they are financing part of the purchase price directly to the buyer, which can come with its own set of costs. By agreeing to bear these costs, the buyer assumes responsibility for managing the financial aspects of the transaction, which can include fees for legal representation related to the mortgage, mortgage registration fees, and other associated costs. Understanding this allocation of responsibility helps clarify the financial duties of each party in a real estate transaction, establishing a clear framework for expectations and obligations regarding mortgages and related expenses.