Contracts and Closing – 302 Questions
and Answers 100% Pass
What is a contingency in a real estate contract?
✔✔ A condition that must be met for the contract to become binding.
How should a broker handle an incomplete or incorrect closing document?
✔✔ Address the issue immediately with the relevant parties to correct and complete the
document before closing.
What is the purpose of an inspection contingency in a purchase agreement?
✔✔ To allow the buyer to request repairs or negotiate terms based on the findings of a property
inspection.
What must be done if a closing date needs to be rescheduled?
✔✔ Obtain agreement from all parties involved and amend the contract to reflect the new
closing date.
What is the function of a settlement statement in the closing process?
1
, ✔✔ To itemize all financial transactions and adjustments between the buyer and seller.
How is earnest money typically handled in a real estate transaction?
✔✔ It is deposited into an escrow account and applied toward the purchase price at closing.
What should a buyer do if they discover a discrepancy in the property’s legal description?
✔✔ Request a correction from the seller and ensure the legal description is accurate before
closing.
What document formalizes the transfer of ownership from the seller to the buyer?
✔✔ The deed.
What is a closing cost credit, and how does it benefit buyers?
✔✔ It is an amount paid by the seller to help cover the buyer’s closing costs, reducing the
buyer’s out-of-pocket expenses.
What information must be verified during the closing process to ensure a successful transaction?
2
and Answers 100% Pass
What is a contingency in a real estate contract?
✔✔ A condition that must be met for the contract to become binding.
How should a broker handle an incomplete or incorrect closing document?
✔✔ Address the issue immediately with the relevant parties to correct and complete the
document before closing.
What is the purpose of an inspection contingency in a purchase agreement?
✔✔ To allow the buyer to request repairs or negotiate terms based on the findings of a property
inspection.
What must be done if a closing date needs to be rescheduled?
✔✔ Obtain agreement from all parties involved and amend the contract to reflect the new
closing date.
What is the function of a settlement statement in the closing process?
1
, ✔✔ To itemize all financial transactions and adjustments between the buyer and seller.
How is earnest money typically handled in a real estate transaction?
✔✔ It is deposited into an escrow account and applied toward the purchase price at closing.
What should a buyer do if they discover a discrepancy in the property’s legal description?
✔✔ Request a correction from the seller and ensure the legal description is accurate before
closing.
What document formalizes the transfer of ownership from the seller to the buyer?
✔✔ The deed.
What is a closing cost credit, and how does it benefit buyers?
✔✔ It is an amount paid by the seller to help cover the buyer’s closing costs, reducing the
buyer’s out-of-pocket expenses.
What information must be verified during the closing process to ensure a successful transaction?
2
