Humber/Ontario Real Estate Course 3 Exam Practice

In a real estate transaction, which document legally binds the buyer and the seller to the terms of the sale?

1. Listing Agreement.

2. Buyer Representation Agreement.

3. Agreement of Purchase and Sale.

4. Property Disclosure Form.

5. Purchase Intent Document.

6. Sale Confirmation Note.

The correct answer is: Agreement of Purchase and Sale.

The Agreement of Purchase and Sale is the document that legally binds the buyer and the seller to the terms of the sale in a real estate transaction. This agreement outlines all critical details, including the purchase price, conditions of the sale, and any contingencies that must be met before the transaction can close. Once both parties sign this document, it serves as a legally enforceable contract, meaning that both the buyer and seller are obliged to follow through with the terms agreed upon. Other documents mentioned may play important roles in real estate dealings, but they do not constitute the main binding agreement between the buyer and seller. For instance, the Listing Agreement primarily pertains to the relationship between a seller and their agent concerning the sale of the property, while the Buyer Representation Agreement establishes the relationship between a buyer and their realtor. The Property Disclosure Form is typically filled out by the seller to communicate any known issues with the property, but it does not bind either party to the sale. Similarly, Purchase Intent Document and Sale Confirmation Note do not function as binding contracts regarding the sale terms themselves but may serve other purposes in the transaction process.