Contracts
In a real estate contract, 'consideration' most commonly takes the form of:
AThe buyer's earnest money and the seller's promise to convey title✓ Correct
BThe agent's promise to market the property
CThe buyer's credit score
DAREC's approval of the contract
Explanation
Consideration is something of value exchanged between parties. In a real estate purchase contract, the buyer's consideration is the payment (purchase price/earnest money) and the seller's consideration is the promise to convey the property.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
State-Specific Concepts
AREC Regulation
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