A Florida buyer deposits $12,000 earnest money on a $400,000 purchase. At closing, the buyer brings an additional $68,000 as their down payment. What percentage of the purchase price did the buyer put down total?
Correct Answer
A) 20%
Correct: ($12,000 + $68,000) ÷ $400,000 = $80,000 ÷ $400,000 = 0.20 = 20%. Why not A: 17% would be $68,000 total, not including earnest money. Why not C: 23% would be approximately $92,000 total down payment. Why not D: 25% would be $100,000 total down payment.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
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Previous Question
A buyer defaults on a Florida real estate contract after all contingencies have expired. The contract specifies that earnest money will be forfeited as liquidated damages. However, the actual damages to the seller are significantly higher than the earnest money amount. Can the seller pursue additional damages beyond the earnest money?
Next Question
All of the following situations would require a Florida broker to return earnest money to the buyer EXCEPT: