Humber Real Estate - Course 2, Module 5,
The Financial Aspects of the Buying and
Selling Process and the Role of Third-Party
Professionals UPDATED Questions and
CORRECT Answers
- Home stager
- Lender (i.e. a cost associated with discharging a mortgage early)
- Surveyor
- Lawyer
- HST or capital gains tax
- Moving expenses - Correct Answer- What are some examples of common expenses that a
seller may incur in a typical real estate transaction?
- Review the Agreement of Purchase and Sale
- Note any deadlines to ensure the transaction proceeds as scheduled
- Respond to any questions or concerns received from the buyer's lawyer
- Fulfill any other requirements of the transaction
- Ensure that prepaid expenses are returned to the seller by way of adjustments and that they
have settled any outstanding property tax or utility payments before closing
- Transfer the property title to the new owner - Correct Answer- What tasks will a lawyer
complete when working with a seller?
Lawyer fees, brokerage fees or commissions (if applicable), and moving costs. - Correct
Answer- On what types of services is HST applicable on?
When there is a capital gain realized on the sale of a seller's rental or investment property, or
non-principal residence. - Correct Answer- When is capital gains tax applicable?
On the seller's next income tax return. - Correct Answer- When would the capital gains tax be
payable?
,No. The seller should be advised to contact their accountant for an estimate as this is beyond
the expertise of a salesperson. - Correct Answer- If a seller asks you for an estimate of the
capital gains tax payable, can you provide this service to your client?
Costs that are allocated between the seller and buyer on closing. It could be a debit or credit
to either party depending on the situation. - Correct Answer- Define 'Adjustments' when
referring to the sale of a property.
Unmetered utility costs and property tax. - Correct Answer- What are the most commonly
adjusted for expenses?
- Property inspector
- Appraiser
- Surveyor
- Lawyer
- Land transfer tax and HST on various services
- Commission
- Moving expenses
- Expenses related to adjustments made on closing - Correct Answer- What are some
common expenses buyers will encounter?
Information about the physical structure, including the roof, attic, walls, floors, ceiling,
windows, doors, insulation and all other visible components of the structure.
The mechanical systems are also inspected, including the condition of the heating system,
central air conditioning, electrical, plumbing and other systems. - Correct Answer- What does
an inspection report by a Property Inspector cover?
- The buyer pays
- The lender requires it - Correct Answer- Who normally pays for the appraisal cost of a
house during a sale? Who requires an appraisal to be completed?
The property's size, shape, terrain and accessibility. - Correct Answer- What can a surveyor's
fee depend on?
, Adjustment item
Note: Sometimes the buyer may be obligated to pay commission to the brokerage that is
representing them under the terms of a buyer representation agreement. In those cases the
buyer can pay the commission directly to their brokerage or instruct their lawyer to pay the
fee. - Correct Answer- The commission paid to the brokerage(s) is most commonly paid to
the listing brokerage by the seller's lawyer (as per the terms of the seller representation
agreement) and appear as an ___________ __________ on the Statement of Adjustments.
The day before closing. - Correct Answer- How long is a seller responsible for costs
associated with the property?
- Canadian citizen or permanent resident of Canada
- 18 years of age or older
- Must occupy the home as a principal residence within 9 months of registration
- Cannot have owned a home anywhere in the world (this is confirmed by signing an affidavit
with a lawyer.)
- If the purchase has a spouse, the spouse cannot have owned an eligible home or had any
ownership interest in an eligible home anywhere in the world while he or she was the
purchaser's spouse. (This is confirmed by signing an affidavit with a lawyer.) If they have,
then a refund would not be available to either spouse. - Correct Answer- What are the criteria
to quality for the First-time buyers refund / tax credit?
Up to $4,000 - Correct Answer- How much money can buyers of new homes claim for a first-
time buyer refund?
The buyer - Correct Answer- According to the Vendors and Purchasers Act, who is
responsible for the costs that are incurred on the day of closing?
The lender took physical possession of the property. The property reverted to the original
owner on a specified date, assuming the loan was paid with interest. Otherwise, the property
was lost forever due to lack of payments on agreed dates.
Over the years, the intent underlying a mortgage changed. The borrower came to retain
possession of the land but pledges it to the lender as security. - Correct Answer- Historically
how were borrowed funds traditionally secured by the lender?
The Financial Aspects of the Buying and
Selling Process and the Role of Third-Party
Professionals UPDATED Questions and
CORRECT Answers
- Home stager
- Lender (i.e. a cost associated with discharging a mortgage early)
- Surveyor
- Lawyer
- HST or capital gains tax
- Moving expenses - Correct Answer- What are some examples of common expenses that a
seller may incur in a typical real estate transaction?
- Review the Agreement of Purchase and Sale
- Note any deadlines to ensure the transaction proceeds as scheduled
- Respond to any questions or concerns received from the buyer's lawyer
- Fulfill any other requirements of the transaction
- Ensure that prepaid expenses are returned to the seller by way of adjustments and that they
have settled any outstanding property tax or utility payments before closing
- Transfer the property title to the new owner - Correct Answer- What tasks will a lawyer
complete when working with a seller?
Lawyer fees, brokerage fees or commissions (if applicable), and moving costs. - Correct
Answer- On what types of services is HST applicable on?
When there is a capital gain realized on the sale of a seller's rental or investment property, or
non-principal residence. - Correct Answer- When is capital gains tax applicable?
On the seller's next income tax return. - Correct Answer- When would the capital gains tax be
payable?
,No. The seller should be advised to contact their accountant for an estimate as this is beyond
the expertise of a salesperson. - Correct Answer- If a seller asks you for an estimate of the
capital gains tax payable, can you provide this service to your client?
Costs that are allocated between the seller and buyer on closing. It could be a debit or credit
to either party depending on the situation. - Correct Answer- Define 'Adjustments' when
referring to the sale of a property.
Unmetered utility costs and property tax. - Correct Answer- What are the most commonly
adjusted for expenses?
- Property inspector
- Appraiser
- Surveyor
- Lawyer
- Land transfer tax and HST on various services
- Commission
- Moving expenses
- Expenses related to adjustments made on closing - Correct Answer- What are some
common expenses buyers will encounter?
Information about the physical structure, including the roof, attic, walls, floors, ceiling,
windows, doors, insulation and all other visible components of the structure.
The mechanical systems are also inspected, including the condition of the heating system,
central air conditioning, electrical, plumbing and other systems. - Correct Answer- What does
an inspection report by a Property Inspector cover?
- The buyer pays
- The lender requires it - Correct Answer- Who normally pays for the appraisal cost of a
house during a sale? Who requires an appraisal to be completed?
The property's size, shape, terrain and accessibility. - Correct Answer- What can a surveyor's
fee depend on?
, Adjustment item
Note: Sometimes the buyer may be obligated to pay commission to the brokerage that is
representing them under the terms of a buyer representation agreement. In those cases the
buyer can pay the commission directly to their brokerage or instruct their lawyer to pay the
fee. - Correct Answer- The commission paid to the brokerage(s) is most commonly paid to
the listing brokerage by the seller's lawyer (as per the terms of the seller representation
agreement) and appear as an ___________ __________ on the Statement of Adjustments.
The day before closing. - Correct Answer- How long is a seller responsible for costs
associated with the property?
- Canadian citizen or permanent resident of Canada
- 18 years of age or older
- Must occupy the home as a principal residence within 9 months of registration
- Cannot have owned a home anywhere in the world (this is confirmed by signing an affidavit
with a lawyer.)
- If the purchase has a spouse, the spouse cannot have owned an eligible home or had any
ownership interest in an eligible home anywhere in the world while he or she was the
purchaser's spouse. (This is confirmed by signing an affidavit with a lawyer.) If they have,
then a refund would not be available to either spouse. - Correct Answer- What are the criteria
to quality for the First-time buyers refund / tax credit?
Up to $4,000 - Correct Answer- How much money can buyers of new homes claim for a first-
time buyer refund?
The buyer - Correct Answer- According to the Vendors and Purchasers Act, who is
responsible for the costs that are incurred on the day of closing?
The lender took physical possession of the property. The property reverted to the original
owner on a specified date, assuming the loan was paid with interest. Otherwise, the property
was lost forever due to lack of payments on agreed dates.
Over the years, the intent underlying a mortgage changed. The borrower came to retain
possession of the land but pledges it to the lender as security. - Correct Answer- Historically
how were borrowed funds traditionally secured by the lender?
