### What is the primary purpose of a purchase agreement in real estate? - [x] To outline the terms and conditions of the real estate sale - [ ] To provide a rental agreement for tenants - [ ] To estimate the market value of the property - [ ] To offer home improvement recommendations > **Explanation:** A purchase agreement is a legal document that outlines the specific terms and conditions agreed upon by the buyer and the seller in a real estate transaction. This includes the price, contingencies, earnest money, and other critical details. ### What kind of contingencies might be included in a purchase agreement to protect the buyer? - [ ] High property tax - [x] Positive home inspection - [ ] Low water pressure - [ ] Recent paint job > **Explanation:** Common contingencies in a purchase agreement include conditions such as a positive home inspection, necessary repairs, and financial contingencies, such as securing bank financing. These protect the buyer by allowing them to back out or renegotiate if certain conditions are not met. ### Who needs to sign the purchase agreement for it to be valid? - [ ] Only the buyer - [x] Both the buyer and the seller - [ ] Only the real estate agent - [ ] Only the lender > **Explanation:** For a purchase agreement to be valid, it must be signed by both the buyer and the seller. This indicates mutual agreement to the terms stated in the document, making it legally binding. ### What information about the earnest money is typically included in a purchase agreement? - [ ] The interest rate - [ ] The neighborhood demographics - [x] The amount of earnest money put down - [ ] The buyer's credit score > **Explanation:** A purchase agreement typically includes the amount of earnest money that will be put down on the property. Earnest money shows the buyer's good faith and commitment to the transaction. ### What is a common financial contingency included in a purchase agreement? - [ ] The seller's tax returns - [x] The buyer receiving needed bank financing - [ ] The real estate agent's commission - [ ] The property's history > **Explanation:** A common financial contingency in a purchase agreement is one where the final sale is contingent on the buyer receiving the necessary financing from their bank or lender. This ensures the buyer can secure the funds to complete the purchase. ### What might be included in a purchase agreement if there is a lease period before the sale? - [x] The lease price, period, and terms - [ ] The future resale value - [ ] The previous owner's contact information - [ ] The maintenance record of household appliances > **Explanation:** If a lease period precedes the sale of the property, the purchase agreement will typically include the lease price, the duration of the lease period, and any specific lease terms that both parties must adhere to during that time. ### What is NOT typically included in a purchase agreement? - [ ] The closing date - [ ] Escrow information - [ ] Environmental requirements - [x] The appraisal report > **Explanation:** While the closing date, escrow information, and environmental requirements are typically included in a purchase agreement, the appraisal report is generally conducted separately. The findings might influence the terms but are not a direct part of the agreement. ### How does the purchase agreement protect the buyer in case of serious property damage found before closing? - [ ] By requiring the seller to pay double the property value - [x] By including contingencies such as mandatory repairs or positive home inspections - [ ] By voiding the contract automatically - [ ] By having the buyer pay less property tax > **Explanation:** The purchase agreement can protect the buyer through contingencies that require any serious property damage to be rectified or by allowing the buyer an out if the inspection is not satisfactory. This ensures the buyer does not end up with unexpected and costly repairs. ### When is the earnest money usually returned to the buyer? - [ ] Immediately after signing the purchase agreement - [x] If the buyer withdraws due to failed contingencies - [ ] At the next tax submission - [ ] A year after closing > **Explanation:** Earnest money is usually returned to the buyer if they withdraw from the sale due to failed contingencies, like an unsatisfactory home inspection or inability to secure financing. However, the terms can vary and should be clearly outlined in the purchase agreement. ### What home-related details will typically be found in a purchase agreement? - [x] Home warranties, repair requirements, and inspection outcomes - [ ] The future property's hard-scape design - [ ] The interior wall paint color - [ ] Exact number of bushes planted in the yard > **Explanation:** Home-related details such as home warranties, required repairs, and inspection outcomes are typically included in a purchase agreement. These are crucial for ensuring the buyer is aware of the property's condition and any potential issues.