RES Real Estate Contracts & Transactions 2

Question 1

What is an escrow account in real estate?

Accepted Answer

A neutral third-party account that holds funds and documents until all conditions of the transaction are met

Answer

The buyer's personal savings account

Answer

A government fund for property taxes

Answer

A checking account owned by the real estate agent

Question 2

What is a counteroffer in real estate negotiations?

Accepted Answer

A response to an offer that changes one or more terms, rejecting the original offer and creating a new offer

Answer

An identical copy of the original offer

Answer

A verbal agreement to the original terms

Answer

A withdrawal from negotiations

Question 3

What is dual agency and what are the risks?

Accepted Answer

When one agent or brokerage represents both buyer and seller, creating potential conflicts of interest

Answer

When two agents from different firms share a commission

Answer

When an agent works in two different states

Answer

When a property is listed with two brokerages

Question 4

What is a purchase money mortgage?

Accepted Answer

A mortgage provided by the seller to finance part of the purchase price

Answer

Any mortgage used to buy a property

Answer

A government-backed home loan

Answer

A second mortgage from a bank

Question 5

What is a home inspection contingency?

Accepted Answer

A contract provision allowing the buyer to have the property professionally inspected and negotiate repairs or withdraw based on findings

Answer

A required government inspection before any sale

Answer

An inspection of the buyer's financial records

Answer

A visual check of the property by the listing agent

Question 6

What is RESPA (Real Estate Settlement Procedures Act)?

Accepted Answer

A federal law that requires disclosure of closing costs and prohibits kickbacks in real estate transactions

Answer

A state licensing requirement for real estate agents

Answer

An environmental regulation for property development

Answer

A tax law for capital gains on real estate