Contracts
In Iowa, an earnest money check returned for insufficient funds from the buyer:
AAutomatically terminates the purchase contract
BDoes not automatically void the contract but gives the seller grounds for breach and remedies✓ Correct
CIs a criminal offense requiring IREC investigation
DConverts the purchase agreement into a lease
Explanation
A dishonored earnest money check is a breach of the buyer's obligation under the purchase agreement. The seller may pursue remedies including keeping the earnest money as liquidated damages or seeking specific performance, but the contract is not automatically voided.
Related Iowa Contracts Questions
- An Iowa 'kick-out clause' in a home sale contingency gives the seller the right to:
- Which of the following BEST describes consideration in a real estate contract?
- Iowa's appraisal contingency in a purchase agreement protects the buyer by:
- What is the legal term for when both parties to an Iowa real estate contract agree to release each other from all obligations?
- An Iowa land contract (contract for deed) differs from a mortgage because:
- Iowa's assignment of contract clause allows the buyer to:
- Iowa's home inspection report is used primarily by the buyer to:
- An Iowa buyer makes an offer of $185,000. The seller counters at $192,000. The buyer then offers $189,000. At this point:
Practice More Iowa Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Iowa Quiz →