Humber/Ontario Real Estate Course 3 Exam Practice

What responsibility does Seller Amari have regarding the discharge of the existing mortgage when selling to Buyer Mustafa?

1. Amari must pay off the existing mortgage from his own cash resources before the closing funds are received

2. Amari typically discharges the existing financing within a reasonable time after closing

3. Amari is not responsible for any associated costs, as that responsibility falls to Buyer Mustafa

4. Amari must ensure that a special clause is added to Schedule A to address this matter

5. Amari must discharge the mortgage three months prior to closing

6. Amari needs to renegotiate the mortgage terms before closing

The correct answer is: Amari typically discharges the existing financing within a reasonable time after closing

Seller Amari's responsibility regarding the discharge of the existing mortgage is that he typically discharges the financing within a reasonable time after closing. This process generally involves ensuring that the mortgage is paid off and any title issues are resolved so that Buyer Mustafa can take possession of the property free from existing financial encumbrances. In real estate transactions, it is standard practice for the seller to manage any existing liens, including mortgages, upon the sale of their property. This is primarily to facilitate a clear transfer of ownership to the buyer, allowing for a smooth transition and preventing the buyer from assuming any unwanted liabilities linked to the property. Amari's obligation to discharge the mortgage ensures that the title is clear and can be transferred without complications related to outstanding debts. The other choices imply responsibilities or actions that are either not standard practices in real estate transactions or place undue burdens on the buyer or on specific timelines that are not typically required.