Humber/Ontario Real Estate Course 4 Exam Practice

Which of the following must be done when there is a need for an amendment to a purchase agreement?

1. Alter the initial agreement and get all parties to initial

2. Reinitiate negotiations through a new counter-offer

3. Ask buyers for verbal consent then proceed

4. Formally cancel the initial agreement and prepare a new one

5. Prepare a written amendment and get signatures from both parties

6. Amend the previous offer and send for brokerage approval

The correct answer is: Prepare a written amendment and get signatures from both parties

The correct answer is to prepare a written amendment and get signatures from both parties. In real estate transactions, it's essential to maintain clear and legally binding documentation, and any changes to a purchase agreement must be formalized in writing. This protects all parties involved by ensuring that there is a clear record of what has been agreed upon. Obtaining signatures from both parties is crucial because it signifies that all stakeholders consent to the changes, thereby preventing any potential disputes or misunderstandings in the future. This process aligns with standard practices in real estate management, which emphasizes the importance of formal agreements. The other options present less effective or legally safe methods for amending a purchase agreement. For instance, simply altering the initial agreement and having parties initial it may not provide the clarity and formality needed. Relying on verbal consent can lead to misunderstandings and is not a substitute for written documentation. Canceling the initial agreement and preparing a new one could be unnecessary and could complicate matters, while reinitiating negotiations through a new counter-offer may also not be required if the existing agreement can be amended satisfactorily. Lastly, amending the previous offer for brokerage approval might not address the need for direct agreement between the parties.