Humber/Ontario Real Estate Course 4 Exam Practice

Which option is a correct practice for handling a supplementary deposit cheque in a real estate transaction?

1. It must be deposited within 24 hours of offer acceptance.

2. It must be given to the listing brokerage immediately.

3. It should be submitted with the offer and held until conditions are fulfilled.

4. It should be kept by a third-party until closing.

5. It must be immediately divided between the cooperating and listing brokerages.

6. It must be returned to the buyer if any condition is not met.

The correct answer is: It should be submitted with the offer and held until conditions are fulfilled.

In a real estate transaction, a supplementary deposit cheque is typically handled as a way to ensure the seller of the buyer's commitment after an offer has been accepted, especially while the conditions are being processed. The correct practice means that the supplementary deposit should be submitted with the offer and held until all conditions related to the sale are fully satisfied. This approach serves as an assurance that the buyer is serious about completing the transaction, and until the conditions are fulfilled, it can remain with the listing brokerage or in trust until a definitive conclusion is reached regarding the sale. This practice helps to protect all parties involved. If the conditions are met, the deposit is applied to the purchase price at closing. Conversely, if the conditions are not met, the terms surrounding the deposit may outline how it should be returned or applied, depending on the agreements made. In contrast, submitting the cheque immediately without the necessary stipulations or incorrectly handling it could create complications or disputes amongst the parties involved, highlighting the importance of adhering to the proper procedures for supplementary deposits in real estate transactions.