A buyer makes an offer on a $450,000 home with earnest money equal to 2% of the purchase price. How much earnest money must be deposited?
Correct Answer
A) $9,000
Correct: $450,000 × 0.02 = $9,000 earnest money deposit. Why not A: This is 1% of purchase price, not 2%. Why not C: This is 5% of purchase price. Why not D: This is 10% of purchase price.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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Previous Question
Broker Sarah receives a $5,000 earnest money deposit from buyer Johnson for a property purchase. The contract states the deposit should be held in escrow. According to Florida law, what must Sarah do with this deposit?
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Buyer Martinez defaults on a purchase contract after the inspection period expires. The seller wants to keep the $8,000 earnest money deposit. Both parties signed a contract with a liquidated damages clause. What should the broker do?