Humber/Ontario Real Estate Course 3 Exam Practice

What type of clause is typically added for a property inspection within an agreement of purchase and sale?

1. A pre-printed clause in the agreement

2. A clause to reduce risks for the seller

3. Discouraged clause unless it's a buyer's market

4. Arranged by the buyer at their expense

5. Clause included in all agreements as standard practice

6. Clause to ensure that any repairs are completed before closing

The correct answer is: Arranged by the buyer at their expense

The inclusion of a property inspection clause in an agreement of purchase and sale typically allows the buyer the opportunity to assess the property's condition before finalizing the transaction. This clause is generally arranged by the buyer at their expense, signifying that the buyer takes the initiative to conduct the inspection, usually by hiring a professional inspector. This approach empowers the buyer to make informed decisions based on the inspection results. In practice, while many agreements may have pre-printed clauses covering various contingencies, a property inspection clause is specifically tailored based on the buyer's request and requirements, thus distinguishing it from standard clauses included in all agreements or those that might reduce risks for the seller. Additionally, while market conditions can influence the inclusion of such clauses, they are not discouraged outright and are common regardless of whether it’s a buyer's or seller's market. The understanding that the buyer incurs the cost for this inspection is critical, as it aligns with the responsibility of ensuring that they are comfortable with the property's condition prior to closing.