### In a straight purchase, who does the buyer provide the down payment to before the construction begins? - [x] The home builder - [ ] The bank - [ ] The real estate agent - [ ] The insurance company > **Explanation:** In a straight purchase, the buyer provides a down payment directly to the home builder before construction begins. This differs from a traditional purchase where the down payment goes to the bank. ### When is the balance of the purchase price paid in a straight purchase? - [ ] At the signing of the initial contract - [x] When the home is completed and the official sale is finalized - [ ] Monthly over the construction period - [ ] At the halfway point of the construction > **Explanation:** In a straight purchase, the buyer will pay the balance of the purchase price when the home is completed and the official home sale is finalized. This ensures that the builder receives initial funding and security to get started. ### How does a straight purchase differ from a traditional purchase regarding mortgage down payment? - [x] The down payment goes to the home builder before the mortgage is finalized in most cases. - [ ] The down payment is held in escrow until construction completes. - [ ] The down payment is applied directly to the mortgage principal. - [ ] There is no down payment required in a straight purchase. > **Explanation:** Unlike in a traditional purchase where the down payment goes to the bank, in a straight purchase, the down payment is provided to the home builder before the mortgage is even finalized in most cases. This provides security and initial funding to the builder before construction starts. ### Who typically completes straight purchases? - [ ] First-time homebuyers - [x] Buyers with significant liquidity - [ ] Buyers looking to refinance - [ ] Buyers purchasing foreclosed properties > **Explanation:** Straight purchases are typically completed by buyers who have substantial liquidity. This is because they need significant funds ready to initiate the down payment directly to the home builder before construction commences. ### What advantage does a home builder gain from a straight purchase? - [x] Security and upfront funding to start construction - [ ] Higher profit margins - [ ] Interest from holding the buyer's funds - [ ] Reduced regulatory scrutiny > **Explanation:** A straight purchase provides the home builder with security and upfront funding to commence construction, reducing their financial risk and ensuring they have the means to start the project. ### Where does the down payment go in a traditional home purchase? - [ ] Directly to the home builder - [x] To the bank - [ ] Into an escrow account - [ ] To the real estate agent > **Explanation:** In a traditional home purchase, the down payment goes to the bank, which facilitates the mortgage financing process. This contrasts with straight purchases where the down payment is provided to the home builder directly. ### Which type of homebuyer is less likely to engage in straight purchases? - [x] Buyers with limited liquidity - [ ] Buyers with significant liquidity - [ ] Investors with substantial capital - [ ] Commercial real estate developers > **Explanation:** Buyers with limited liquidity are less likely to engage in straight purchases because this type of transaction typically requires significant upfront funding. ### What is typically the initiation event for a straight purchase? - [ ] When the mortgage is approved - [ ] When the home reaches halfway construction - [x] When the buyer makes the down payment before construction begins - [ ] When the official sale is finalized > **Explanation:** In a straight purchase, the transaction generally initiates when the buyer makes the down payment to the builder before construction even begins. ### In a straight purchase, what stage is the home at when the buyer makes the down payment? - [x] Before ground is broken - [ ] Halfway through construction - [ ] Completed but not yet sold - [ ] Under final inspection > **Explanation:** Straight purchase involves the buyer making a down payment to the builder before construction begins, providing the builder with funds and security early in the process. ### What best describes the financial needs of a buyer involved in a straight purchase? - [ ] They need a strong credit score - [x] They need significant liquidity - [ ] They need a pre-approved mortgage - [ ] They need federal housing assistance > **Explanation:** Buyers who engage in straight purchases typically need significant liquidity, as they are making upfront payments to the home builder before financial arrangements such as mortgages are usually finalized.