CNE Real Estate Negotiation Fundamentals Flashcards

In a real estate transaction, what does the term 'earnest money' represent?

Answer: A good-faith deposit made by the buyer to demonstrate commitment

Earnest money is a deposit made by the buyer showing genuine intent to purchase, typically held in escrow until closing.

Which negotiation technique involves presenting multiple offers simultaneously to give the seller options?

Answer: Multiple Counter Offer (MCO)

A Multiple Counter Offer (MCO) allows sellers to counter several buyers at once, creating competitive dynamics and preserving negotiating power.

What is the primary purpose of a contingency clause in a real estate purchase agreement?

Answer: To protect the buyer's right to exit the contract under specific conditions

Contingency clauses give the buyer an exit strategy if specific conditions—like financing approval or satisfactory inspection—are not met.

In a seller's market, which negotiation approach is most effective for a buyer?

Answer: Submit a clean offer with minimal contingencies and a competitive price

In a seller's market, buyers must be competitive by reducing friction—clean offers with fewer contingencies appeal most to sellers who have multiple options.

What does 'as-is' mean in a real estate listing negotiation context?

Answer: The seller will not make repairs or provide credits for defects found

An 'as-is' sale means the seller discloses known defects but will not negotiate repairs or credits, shifting risk assessment responsibility to the buyer.

Which term describes the price range within which a real estate negotiation is likely to result in a successful deal?

Answer: Zone of Possible Agreement (ZOPA)

The Zone of Possible Agreement (ZOPA) is the overlap between the seller's minimum acceptable price and the buyer's maximum willingness to pay.