Real Estate Sales Exam Sales Process 3

Question 1

What does 'earnest money' represent in a real estate transaction?

Accepted Answer

A buyer's good-faith deposit showing intent to purchase

Answer

Earnest money is a deposit made by the buyer to demonstrate seriousness and is applied toward the purchase at closing.

Question 2

A seller receives two simultaneous offers. What is the agent's ethical obligation?

Accepted Answer

Present both offers to the seller and let the seller decide

Answer

The agent must present all offers to the seller, who then decides how to respond to each; disclosing one buyer's offer details to another violates confidentiality.

Question 3

Which contingency allows a buyer to exit a contract if they cannot obtain financing?

Accepted Answer

Mortgage contingency

Answer

A mortgage (financing) contingency protects the buyer's earnest money if they are unable to secure a loan within the specified timeframe.

Question 4

What is the difference between a buyer's market and a seller's market?

Accepted Answer

A buyer's market has more homes than buyers; a seller's market has more buyers than homes

Answer

Supply and demand determine market type: excess inventory favors buyers, while scarce inventory gives sellers negotiating power.

Question 5

An agent shows a listed property to a buyer who is also their client. What type of agency situation exists?

Accepted Answer

Dual agency

Answer

Dual agency occurs when one agent or brokerage represents both the buyer and seller in the same transaction, requiring disclosure and consent.

Real Estate Sales Exam Practice Test

Real Estate Sales Exam Practice Test

Real Estate Sales Exam Sales Process 3