Humber/Ontario Real Estate Course 4 Exam Practice

Which requirement must be met for a deposit cheque in a purchase and sale agreement?

1. That the deposit cheque must be certified

2. The cheque must be negotiable, meaning it can be presented at the applicable bank for payment

3. It should be post-dated

4. The cheque should be payable to the buyer's representative

5. The cheque must be submitted in cash

6. The deposit cheque needs to be transferred electronically

The correct answer is: The cheque must be negotiable, meaning it can be presented at the applicable bank for payment

A deposit cheque in a purchase and sale agreement must be negotiable, meaning it can be presented at the applicable bank for payment. This ensures that the funds are accessible and can be processed without issues, guaranteeing that the seller has assurance of receiving the agreed-upon deposit amount. A negotiable cheque effectively secures the transaction and demonstrates the buyer's commitment, as it indicates they have the necessary funds available. This standard aids in maintaining trust between the parties involved in the real estate transaction. The other options do not reflect the typical requirements for a deposit cheque. For example, while a certified cheque provides additional security, it is not always a mandatory requirement for every deposit. Similarly, post-dated cheques, while valid in certain situations, are often not accepted in real estate transactions due to uncertainty regarding fund availability at the time of deposit. Each of the other choices, such as requiring that the cheque be payable to the buyer's representative or be submitted in cash, does not align with common practices in real estate transactions either, as they introduce unnecessary complications or limitations. Submitting the deposit electronically can be a valid method, but it is not a universal requirement. Thus, the emphasis on negotiability as a crucial characteristic of the deposit cheque is what aligns