Humber/Ontario Real Estate Course 1 Exam Practice

If a buyer agrees to a property sale but discovers the property is different from what was believed, this is called?

1. Erroneous understanding

2. Intended misrepresentation

3. Mutual mistake with both parties confused

4. Negligent mistake

5. Buyer's remorse

6. Seller's oversight

The correct answer is: Mutual mistake with both parties confused

The situation described refers to a mutual mistake where both parties have a misunderstanding about the property involved in the sale. When a buyer and seller enter into a contract based on certain beliefs about the property's characteristics—such as its condition, size, or legal status—and later discover a significant discrepancy, this represents a misalignment in their understanding. A mutual mistake indicates that both parties held an incorrect belief that was central to the agreement. This concept is crucial in real estate transactions, as it can impact the validity of the contract and may provide grounds for rescinding the agreement or seeking legal remedies. It highlights the importance of clear communication and due diligence when entering into property transactions to avoid scenarios where misunderstandings can lead to disputes or financial loss. While other terms like negligent mistake or intended misrepresentation involve different levels of fault or intent, they do not fully capture the essence of a situation where both parties are equally mistaken. Similarly, terms like buyer's remorse reflect a personal emotional response rather than a legal standing regarding the transaction itself.