Humber/Ontario Real Estate Course 1 Exam Practice

Which document outlines the legal rights and obligations of buyers and sellers in a property transaction?

1. Agreement of Lease

2. Deed

3. Mortgage Application

4. Agreement of Purchase and Sale

The correct answer is: Agreement of Purchase and Sale

The Agreement of Purchase and Sale is the document that specifically outlines the legal rights and obligations of buyers and sellers in a property transaction. It serves as a binding contract that details the terms of the sale, including the purchase price, closing date, and any conditions that must be met. This document is essential for facilitating the transaction and ensuring that both parties are clear about their responsibilities and entitlements. In contrast, the other documents mentioned do not serve the same purpose within the context of a property transaction. The Agreement of Lease pertains to rental agreements rather than the sale of property, while a Deed is involved in the transfer of ownership but does not detail the terms of the agreement between buyer and seller. A Mortgage Application is focused on the financing aspect of purchasing property and does not address the legal rights related to the transaction itself. Thus, the Agreement of Purchase and Sale is the correct choice for outlining the legal framework of buyer-seller relations in a property transaction.