Contracts
In Tennessee real estate transactions, 'earnest money' serves primarily as:
AThe buyer's down payment at closing
BEvidence of the buyer's good faith and partial consideration for the contract✓ Correct
CThe seller's commission
DA refundable deposit with no legal significance
Explanation
Earnest money demonstrates the buyer's good faith and is part of the consideration supporting the contract. It is applied to the purchase price at closing or may be forfeited or returned depending on contract terms.
Related Tennessee Contracts Questions
- A buyer submits an offer with the financing contingency: 'This contract is contingent on the buyer obtaining a 30-year conventional mortgage at no more than 7% interest for 80% of the purchase price.' If the buyer qualifies for a 7.25% rate, the buyer may:
- Under the Tennessee Residential Property Condition Disclosure Act, the seller disclosure must be provided to the buyer:
- An installment sale contract (land contract or contract for deed) differs from a standard purchase because:
- A real estate contract in which both parties still have obligations to perform is called:
- In Tennessee real estate practice, when a buyer makes an offer and the seller changes any term and signs back, this creates:
- The Tennessee Residential Property Condition Disclosure form must be completed and signed by:
- Which of the following is a valid legal description that could be used in a Tennessee deed?
- The parol evidence rule in contract law means that:
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