Humber/Ontario Real Estate Course 3 Exam Practice

Which of the following is true regarding a buyer's right to a home's risk after offer acceptance?

1. The home is at the buyer's risk from acceptance to completion

2. The home remains at the seller's risk until completion

3. Risk is automatically covered by buyer's insurance

4. Risk transfers only after mortgage approval

5. Risk is split between the buyer and seller

6. Risk transfer is optional and negotiable

The correct answer is: The home remains at the seller's risk until completion

The correct assertion regarding a buyer's right to a home's risk after offer acceptance is that the home remains at the seller's risk until completion. In typical real estate transactions, the seller retains responsibility for the property until ownership is officially transferred to the buyer upon completion of the sale. This means that if any damage or loss occurs to the property during this period—after the acceptance of the offer but before the transaction's finalization—the seller is liable for those damages. This principle is essential as it provides protection for the buyer, ensuring that they are not held accountable for any unforeseen issues that may arise with the property before they take legal possession. While the buyer can obtain insurance for their future ownership, it does not cover risks pertaining to damages incurred while the seller still holds title to the property. Other options present scenarios that deviate from established norms in real estate transactions, such as implications that risk transfers before completion or can be divided, which do not hold true following standard practices in property law.