A buyer in Florida puts down earnest money equal to 2% of the purchase price on a $350,000 home. How much earnest money did the buyer deposit?
Correct Answer
B) $7,000
Correct: $350,000 × 0.02 = $7,000 earnest money deposit. Why not A: $6,000 would be less than 2% of the purchase price. Why not C: $7,500 would be more than 2% of the purchase price. Why not D: $8,000 would be approximately 2.3% of the purchase price.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
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Previous Question
A Florida real estate broker receives a $10,000 earnest money deposit. The buyer defaults on the contract after the inspection period expires. The seller demands the earnest money, but the buyer claims they should receive it back due to financing issues. What should the broker do?
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All of the following are acceptable forms of earnest money deposits in Florida EXCEPT: