Humber/Ontario Real Estate Course 2 Exam Practice

What should a buyer include in the agreement of purchase and sale if they want to earn interest on their deposit?

1. Interest earned on the deposit is automatically owed to the buyer

2. Interest earned impacts the balance due on closing

3. Include an 'interest on deposit' clause in Schedule A

4. Interest earned on the deposit is automatically owed to the seller

The correct answer is: Include an 'interest on deposit' clause in Schedule A

In order for a buyer to earn interest on their deposit in an agreement of purchase and sale, they should include an 'interest on deposit' clause in Schedule A. By including this specific clause in the agreement, it outlines the terms and conditions regarding how interest earned on the deposit will be handled. This helps to protect the buyer's rights and ensures that they receive any interest that accrues on their deposit. Options A and D are incorrect because interest earned on the deposit is not automatically owed to either the buyer or the seller unless specified in the agreement. Option B is incorrect because stating that interest earned impacts the balance due on closing does not address how the interest should be handled or distributed to the buyer. It is important to have a specific clause outlining the interest on the deposit to avoid any misunderstandings or disputes.