Barnard made an offer to buy a vacant residence. The offer was accepted by the seller. Prior to the close of escrow, Barnard requested permission from the broker to enter and make minor repairs to the house. Which of the following is true?
Audio Lesson
Duration: 2:59
Question & Answer
Review the question and all answer choices
The broker is to get a signed rental agreement from Barnard before allowing him to enter.
A rental agreement is inappropriate here as Barnard isn't renting the property but is the buyer with an accepted offer. Rental agreements create landlord-tenant relationships that don't apply during the escrow period of a purchase transaction.
Barnard doesn’t need permission from anyone since he is the equitable owner of the property.
Barnard is the equitable owner, but equitable ownership doesn't grant physical possession rights until escrow closes. The seller retains legal title and control of the property until all conditions are met and title transfers.
The broker needs to get the seller’s permission.
Bernard may only enter to conduct repairs that correct material defects in the property.
There's no legal requirement limiting pre-closing repairs to only those correcting material defects. Buyers can make minor repairs with proper permission, though they typically do so at their own risk before closing.
Why is this correct?
The broker must obtain the seller's permission because the seller still holds legal title and has the right to control access to the property until escrow closes. Equitable ownership doesn't grant physical possession rights, making the seller's permission necessary for any pre-closing entry.
Deep Analysis
AI-powered in-depth explanation of this concept
This question tests understanding of the legal relationship between buyer, seller, and broker during the escrow period in California. The core concept involves property rights and access before title transfer. In real estate practice, this matters because brokers must protect both parties' interests while facilitating transactions. The question explores when a buyer has rights to access property before closing. Equitable ownership (option B) doesn't grant physical rights until escrow closes. Brokers must always obtain seller permission for buyer access during escrow (option C). Option A is incorrect because rental agreements aren't relevant to pre-closing access for repairs. Option D misrepairs by suggesting only material defect repairs are allowed, which isn't a legal requirement. This question is challenging because it tests the distinction between equitable ownership and physical possession, a common point of confusion. It connects to broader knowledge of escrow procedures, agency relationships, and property rights transfer.
Knowledge Background
Essential context and foundational knowledge
In California real estate transactions, the escrow period begins when a purchase agreement is accepted and ends when title transfers to the buyer. During this time, the seller retains legal title and control of the property. Buyers have equitable ownership rights but not physical possession rights. This distinction is crucial because it determines who can access the property, make alterations, or incur liabilities. Brokers must protect both parties by ensuring proper procedures are followed, including obtaining necessary permissions before allowing buyer access for inspections or repairs.
Think of escrow like a hotel reservation - you've booked the room (equitable ownership), but you don't get the key (physical possession) until check-in (closing). The current guest (seller) still has rights until they officially check out.
When questions arise about pre-closing access, visualize this hotel reservation analogy to remember who holds the 'keys' to the property.
For questions about pre-closing property access, remember: legal title stays with seller until closing, so their permission is always required. Equitable ownership ≠ physical possession.
Real World Application
How this concept applies in actual real estate practice
A California buyer, Sarah, purchases a fixer-upper with an accepted offer. She wants to paint some rooms before moving in. Her agent, Mark, contacts the listing agent, who must then get permission from the seller. The seller agrees but requires Sarah to sign a waiver acknowledging she enters at her own risk. Sarah completes the painting, but during the process, accidentally damages a pipe. The seller's insurance covers the damage because Sarah didn't have legal title yet. This scenario highlights why broker procedures require seller permission for pre-closing access.
More Real Estate Financing Episodes
Continue learning with related audio lessons
Maryland recording requirements for mortgages include:
2:13 • 0 plays
Veteran uses Cal-Vet residential loan program with installment sales contract. Who gives deed to property?
2:42 • 0 plays
In Massachusetts, deficiency judgments after foreclosure:
2:48 • 0 plays
Foreclosure in Wisconsin is typically:
2:32 • 0 plays
Maryland's right of redemption is:
2:43 • 0 plays
Ready to Ace Your Real Estate Exam?
Access 2,499+ free podcast episodes covering all 11 exam topics.