Wisconsin Real Estate License Transactions & Contracts 1

Question 1

What is the purpose of a purchase agreement in a real estate transaction?

Accepted Answer

Define terms and obligations of the sale

Answer

Secure financing for the buyer

Answer

Provide a property tax estimate

Answer

Act as a deed transfer document

Question 2

Which type of contract is legally binding in a real estate transaction?

Accepted Answer

Written contract signed by all parties

Answer

Verbal agreement between buyer and seller

Answer

Handshake agreement

Answer

Unofficial email confirmation

Question 3

What is the purpose of earnest money in a real estate transaction?

Accepted Answer

Demonstrate buyer commitment

Answer

Pay off the seller’s mortgage

Answer

Cover title insurance costs

Answer

Eliminate closing costs

Question 4

What happens if a buyer fails to meet the terms of a purchase contract?

Accepted Answer

Forfeit earnest money or face legal action

Answer

Automatically receive a refund

Answer

Gain automatic financing approval

Answer

Have the contract extended indefinitely

Question 5

What is the role of contingencies in a real estate contract?

Accepted Answer

Allow contract termination if conditions aren’t met

Answer

Guarantee contract execution

Answer

Increase closing costs

Answer

Eliminate the need for inspections

Question 6

Why is a closing disclosure important in a real estate transaction?

Accepted Answer

Provides final details on costs and terms

Answer

Acts as the property deed

Answer

Serves as a loan application

Answer

Removes the need for inspections