Sell My House House Buying 2 — Questions and Answers
Question 1: What does 'contingent' mean when a home listing shows that status?
- The home is sold and closed
- An offer has been accepted but conditions must be met (Correct answer)
- The home is available for showings only
- The seller is negotiating with multiple buyers
Correct answer: An offer has been accepted but conditions must be met
Contingent means the seller accepted an offer, but the sale depends on conditions like financing or inspection being satisfied.
Question 2: Which document outlines all the costs a buyer will pay at closing?
- Pre-approval letter
- Title commitment
- Closing Disclosure (Correct answer)
- Purchase agreement
Correct answer: Closing Disclosure
The Closing Disclosure, provided at least three business days before closing, itemizes all final loan terms and closing costs.
Question 3: What is the primary purpose of a home warranty when buying a house?
- To guarantee the title is free of liens
- To cover repair or replacement of major systems after closing (Correct answer)
- To protect the lender if the buyer defaults
- To insure the home against fire and theft
Correct answer: To cover repair or replacement of major systems after closing
A home warranty covers the cost of repairing or replacing major systems and appliances that break down after purchase.
Question 4: When a buyer waives the inspection contingency to make an offer more competitive, what risk do they accept?
- Higher interest rates on the mortgage
- Losing the earnest money if they back out
- Buying the home without knowing its true condition (Correct answer)
- Being required to pay cash for the property
Correct answer: Buying the home without knowing its true condition
Waiving inspection means the buyer agrees to purchase regardless of hidden defects that an inspector might have found.
Question 5: What is 'earnest money' in a real estate transaction?
- The lender's origination fee paid upfront
- A good-faith deposit that shows the buyer is serious (Correct answer)
- The first month's mortgage payment
- A fee paid to the listing agent
Correct answer: A good-faith deposit that shows the buyer is serious
Earnest money is a deposit made by the buyer to demonstrate serious intent; it is applied toward the purchase price at closing.
Question 6: Which loan type allows a buyer to purchase a home with as little as 3.5% down payment?
- Conventional loan
- VA loan
- FHA loan (Correct answer)
- USDA loan
Correct answer: FHA loan
FHA loans are government-backed mortgages that allow down payments as low as 3.5% for buyers with qualifying credit scores.
Question 7: What does a title search confirm before a home purchase closes?
- The home's market value
- That the seller legally owns the property and there are no liens (Correct answer)
- The structural integrity of the foundation
- That the property taxes are current
Correct answer: That the seller legally owns the property and there are no liens
A title search reviews public records to verify ownership history and identify any liens, judgments, or encumbrances on the property.
Sell My House House Buying 2
What does 'contingent' mean when a home listing shows that status?