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Purchase Agreements – Final Exam

Purchase Agreements – Final Exam

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Question 1 of 10

1. Question

Which statement best describes the role of a real estate professional when using the Minnesota Purchase Agreement?

Interpreting legal consequences for clients
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Explaining what the form requires and helping clients make informed choices
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Providing tax advice related to the transaction
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Making final decisions when disputes arise
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Question 2 of 10

2. Question

Which three elements are commonly referred to as the “Three P’s” on page one of the purchase agreement?

Price, possession, prorations
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Parties, property, price
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Property, possession, payments
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Parties, price, possession
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Question 3 of 10

3. Question

Why is accuracy on page one of the purchase agreement especially important?

It determines inspection results
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Errors can affect later sections and timelines
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It sets the closing costs
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It replaces the legal description
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Question 4 of 10

4. Question

What is the primary purpose of earnest money?

To reduce the purchase price
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To pay property taxes
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To show the buyer’s good faith
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To guarantee loan approval
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Question 5 of 10

5. Question

What does a contingency in a purchase agreement do?

Transfers ownership
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Sets the closing date
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Creates conditions that must be met to proceed
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Eliminates deadlines
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Question 6 of 10

6. Question

If a buyer misses the inspection contingency deadline, what is the likely result?

The seller must renegotiate
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The buyer automatically cancels
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The contingency may be removed and the transaction continues
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Earnest money is refunded automatically
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Question 7 of 10

7. Question

What does the risk of loss clause address?

Buyer’s financing approval
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Damage to the property before closing
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Title defects
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Closing costs
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Question 8 of 10

8. Question

What is the purpose of prorations at closing?

To eliminate seller expenses
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To divide costs fairly based on ownership time
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To delay payment of taxes
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To reduce lender fees
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Question 9 of 10

9. Question

When does final acceptance of the purchase agreement occur?

When the buyer signs
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When the seller signs
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When all parties receive a fully executed contract
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At the closing table
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Question 10 of 10

10. Question

What is the proper role of a real estate professional when working with the purchase agreement?

Provide legal advice
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Decide disputes between parties
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Explain the form, flag concerns, and refer legal issues out
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Interpret tax consequences
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