Sandra, a buyer in Pennsylvania, submits an offer that includes a hand money deposit of $5,000. According to the PAR Agreement of Sale, where must this deposit be held?
Correct Answer
A) In the listing broker's escrow or trust account
Under the PA Real Estate Licensing and Registration Act (RELA) and the PAR Agreement of Sale, hand money (earnest money) deposits must be held in a broker's escrow or trust account. The broker identified in the agreement is responsible for safeguarding the deposit.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
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.
More Pa Specific Contract Provisions Questions
Under the PAR Agreement of Sale, all of the following are obligations of the buyer under the mortgage contingency EXCEPT:
A licensee in Pennsylvania is preparing a PA Agreement of Sale that includes an option for the buyer to purchase the property within 90 days. What makes an option contract valid in Pennsylvania?
A seller in Lehigh County discovers that the buyer has been secretly negotiating to purchase a different property while under contract. The buyer has not yet breached any deadlines. Can the seller declare the buyer in default?
A licensed salesperson in Pennsylvania mishandles the hand money deposit by depositing it into their personal account instead of the broker's escrow account. The buyer later defaults, and the deposit is not fully available. What are the consequences for the salesperson?
A buyer in Schuylkill County enters into a PA Agreement of Sale for a property that was listed as having 3 acres. After closing, the buyer discovers the property is only 2.5 acres based on a new survey. The Agreement of Sale did not include a survey contingency. What remedy may the buyer pursue?
- → A buyer in Westmoreland County has an inspection contingency that expires in 5 days. The buyer has not yet scheduled an inspection. On day 4, the buyer asks the seller for a 10-day extension. The seller refuses. What happens?
- → A buyer in Lycoming County has an inspection contingency in the PA Agreement of Sale. The buyer's inspector recommends that a licensed electrician evaluate the electrical panel. The buyer schedules an electrician, but the seller refuses access for the follow-up inspection within the contingency period. What is the buyer's best course of action?
- → A buyer in Blair County closes on a property and later discovers the seller's real estate agent knew about a major plumbing defect but did not disclose it. The buyer sues both the seller and the agent. If the buyer obtains a judgment against the agent but the agent cannot pay, what is the maximum the buyer can recover from the PA Real Estate Recovery Fund per transaction?
- → A buyer in Pennsylvania purchases a property contingent on obtaining FHA financing. The FHA appraisal identifies health and safety issues that must be corrected before the loan can close. The seller refuses to make the required repairs. What is the buyer's best course of action?
- → Under the PAR Agreement of Sale, the buyer has an inspection contingency with a 10-day inspection period. On day 8, the buyer submits a repair request. The seller does not respond by the end of day 10. What happens under the standard PAR provisions?
- → A buyer in Dauphin County wants to know what happens to the hand money if both the buyer and seller agree to cancel the PA Agreement of Sale by mutual consent. What is the typical outcome?
- → A buyer in Erie County wants to know who decides if a breach of the Agreement of Sale has occurred. Under PA law, who makes this determination?
- → A buyer in Cambria County wants to sue a seller for breach of the PA Agreement of Sale. The buyer's attorney recommends filing in the Court of Common Pleas. What type of court is the Court of Common Pleas in Pennsylvania?
- → A buyer defaults on a PA Agreement of Sale with a purchase price of $380,000. The hand money deposit is $12,000 (retained by the seller as liquidated damages). The seller relists and sells the property 4 months later for $365,000, incurring $6,000 in additional carrying costs and $4,500 in remarketing expenses. If the seller had pursued actual damages instead of liquidated damages, what is the total potential actual damage claim?
- → Under the PAR Agreement of Sale, which of the following is NOT a standard remedy available to the seller when a buyer defaults on the contract?
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Previous Question
Robert makes an offer on a house in Philadelphia using the PAR Agreement of Sale. The seller signs the agreement but changes the closing date from June 15 to July 1. Under Pennsylvania contract law, what has the seller created?
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Kevin enters into a PA Agreement of Sale to purchase a home for $350,000. The agreement states that time is of the essence. Kevin fails to secure financing by the specified deadline but asks the seller for a 10-day extension. What is the seller's legal position?