Humber/Ontario Real Estate Course 2 Exam Practice

How should a multiple deposit scenario be handled when determining balance due on closing?

1. Total deposits deducted from the purchase price.

2. Only initial deposit deducted.

3. Deposits not considered in balance calculation.

4. Certain deposits affect balance.

5. Prior agreements on deposits mandatory.

6. Conditional deposit deductions.

The correct answer is: Total deposits deducted from the purchase price.

In a multiple deposit scenario when determining the balance due on closing, all deposits made by the buyer should typically be deducted from the purchase price. This is to ensure that the balance due at closing accurately reflects the total amount owed by the buyer after taking into account all deposits that have been made throughout the transaction. By deducting all deposits, the final amount due on closing can be calculated correctly, providing clarity to both the buyer and the seller regarding the financial aspects of the transaction. Option B is incorrect as it suggests that only the initial deposit should be deducted, which would not accurately reflect the total amount of deposits made by the buyer in a multiple deposit scenario. Option C is incorrect as deposits play a crucial role in the financial calculations on closing, and thus should be considered when determining the balance due. Options D, E, and F do not accurately reflect the standard procedure for handling multiple deposits in real estate transactions in Ontario.