Humber/Ontario Real Estate Course 3 Exam Practice

What is typical in a condition precedent clause related to securing a new mortgage for a buyer client?

1. Blended mortgage payment requirement

2. First condition in a multiple condition offer

3. Inclusion of a waiver provision

4. Lender’s approval

5. Pre-approval confirmation

6. Use of varied mortgage rates

The correct answer is: Inclusion of a waiver provision

The typical aspect of a condition precedent clause related to securing a new mortgage for a buyer client is the inclusion of a waiver provision. A waiver provision allows the buyer to waive the condition if they choose to proceed with the purchase despite not securing the mortgage under the specified terms. This is significant because it provides flexibility to the buyer, ensuring they are not unduly limited by financing requirements. In real estate transactions, conditions precedent are often included to protect buyers, and having an option to waive such conditions can facilitate a smoother transaction process. It also indicates to the lender that the buyer has the room to manage expectations and act decisively, even if the initial financing conditions are not met to their liking. In contrast, while lender's approval and pre-approval confirmation are common elements in mortgage proceedings, they are not typically specified as part of a condition precedent clause in the same way. Therefore, while they are related to the mortgage process, they do not specifically fulfill the role that a waiver provision does within the context of conditions in an offer.