Under what circumstances may a buyer receive their earnest money deposit back without penalty in California?
Why When the buyer cancels pursuant to a valid, unfulfilled contingency Is Correct
Answer B: When the buyer cancels pursuant to a valid, unfulfilled contingency
Exam Tip: Contracts
Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.
Key Contracts Terms in This Question
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.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
People Also Study
Related California Questions
- A broker receives a check as earnest money. Under California law, the broker must deposit it into the trust account within:Trust Funds
- A broker must deposit a buyer's earnest money deposit into a trust account within:Trust Funds
- A salesperson who works for Broker A receives an earnest money deposit. Without telling Broker A, the salesperson deposits it into the salesperson's own personal account. This is:Trust Funds
- What happens to the buyer's earnest money deposit if the buyer backs out of a purchase contract after removing all contingencies in California?Contracts
- What must a broker do when they receive a buyer's earnest money deposit check with instructions to hold it uncashed pending acceptance?Trust Funds
- In California, a landlord must return a security deposit within how many days of a tenant moving out?Property Management
- What must a DRE licensee do when they receive a dispute over earnest money between a buyer and seller?DRE & Licensing
- A California residential purchase agreement includes a 17-day inspection contingency. On day 18, the buyer has not removed the contingency or canceled. What is the correct procedure for the seller?Contracts
Key Terms to Know
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.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Math Concepts
State-Specific Concepts
Study This Topic
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →