Contracts
In Hawaii, what is 'consideration' in a real estate contract?
AA. The agent's thoughtful preparation of the offer
BB. Something of value exchanged by each party to make the contract legally binding✓ Correct
CC. The time each party takes to review the contract
DD. The attention given to property condition disclosures
Explanation
Consideration is something of value (money, goods, services, or a promise) exchanged between the parties that makes the contract binding. In real estate, the purchase price and the promise to convey title are the consideration.
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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.
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.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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