Humber/Ontario Real Estate Course 3 Exam Practice

What is the best label for a buyer's request for additional home inspections in a purchase agreement?

1. A final offer

2. A new condition

3. An amended agreement clause

4. An additional service

5. An inspection contingency

6. A buyer requirement

The correct answer is: An inspection contingency

The appropriate label for a buyer's request for additional home inspections in a purchase agreement is an inspection contingency. This term refers to a provision in a real estate contract that allows the buyer to conduct inspections of the property within a specified time frame. It serves as a safeguard for the buyer, allowing them the right to inspect the property thoroughly and potentially renegotiate or withdraw from the agreement based on the findings. Having an inspection contingency is crucial because it ensures that the buyer is not obligated to proceed with the purchase if significant issues are discovered during the inspections. Instead, they can either request repairs, adjust the purchase price, or opt out of the transaction altogether based on the results of the inspections, thus protecting their interests. The other options do not accurately describe the purposes and implications of requesting additional home inspections within a purchase agreement. For instance, a new condition implies adding an entirely different term to the agreement rather than modifying existing ones regarding inspections. Amended agreement clauses suggest changes to the core of the contract rather than establishing a specific provision for inspections. Similarly, the phrases 'additional service', 'buyer requirement', and 'final offer' don’t capture the essence of the request for further inspections in the same way the term "inspection contingency" does.