Humber/Ontario Real Estate Course 3 Exam Practice

A homeowner wants to remove a mortgage condition in a competitive offer. What risk does this pose?

1. Negligible risk if prequalified for a mortgage.

2. Minor risk if the offer price is above the listing price.

3. Increased risk without the property inspection condition.

4. High risk changing any terms to make the offer more attractive.

The correct answer is: Increased risk without the property inspection condition.

The correct choice highlights the significant risk associated with removing the property inspection condition. By doing so, the homeowner could be exposing themselves to unforeseen issues with the property that may not be immediately visible. Without an inspection, they might inadvertently agree to purchase a home with structural or maintenance problems, leading to costly repairs down the line. In competitive real estate markets, buyers often feel pressure to make their offers more appealing by forgoing contingencies; however, the inspection condition is crucial as it ensures that the buyer is aware of the property's condition before finalizing the sale. Removing this protection can have serious financial implications if major defects are discovered post-purchase. Other options present scenarios that either mitigate risk or focus on factors that do not directly address the importance of a property inspection. For instance, being prequalified for a mortgage may give a buyer confidence in their financial ability to close on the home, but it does not safeguard against potential defects in the property itself. Similarly, a minor risk could be suggested if the offer is above the listing price, but that does not account for the inherent dangers of bypassing a thorough property inspection. Ultimately, the emphasis should be on the heightened vulnerability posed by neglecting the property condition when making an offer.