2.3 - Purchase & Sale Process I

Question 1

Define real vs. personal property.

Answer 1

Real: Land & permanently affixed improvements/fixtures.

Personal (chattel): Moveable items not permanently attached.

Question 2

Kitchen photo — name 2 real-property items.

Answer 2

Built-in cabinets • Granite countertops • Hard-wired pendant lights • Hardwood flooring.

Question 3

Kitchen photo — name 2 personal-property items.

Answer 3

Stools • Place settings • Vase & flowers • Removable countertop appliances (e.g., espresso machine).

Question 4

Potted-tree photo — which is personal vs. real?

Answer 4

Trees in pots = personal (can be moved).

If planted in ground = real property.

Question 5

Shed photo — fixture or personal?

Answer 5

Depends on attachment:
• Bolted to concrete slab → likely real.
• Simply resting on lawn → personal.

Question 6

Why list fixtures explicitly in the contract?

Answer 6

Prevents disputes / last-minute swaps; clarifies what conveys.

Question 7

Risk of ‘phantom fixture’ swap (fridge example).

Answer 7

Seller might replace a high-end built-in fridge with an old unit; clear inclusion clause prevents this.

Question 8

What is ‘earnest money’ (deposit)?

Answer 8

Buyer’s good-faith deposit; forfeited if buyer defaults on closing.

Question 9

Down-payment vs. deposit.

Answer 9

Deposit secures contract.

Down-payment is portion (or all) of purchase price paid at closing.

Question 10

Name three common closing costs.

Answer 10

Title insurance premium • Transfer tax/recording fee • Pre-paid property tax or HOA dues (allocation agreed in contract).

Question 11

Purpose of the Closing Date clause.

Answer 11

Defines the legal conveyance date & deadline for fund transfer and deed recording.

Question 12

List five typical contingencies.

Answer 12

1. Inspections 2. Financing (mortgage) 3. Insurance availability 4. Permits/Re-zoning 5. Engineering/structural review.

Question 13

What happens when contingencies expire unwaived?

Answer 13

Deal terminates or becomes pending/firm (non-contingent) depending on clause language.

Question 14

Seller disclosure obligation – core idea.

Answer 14

Must reveal material defects or issues not readily observable that could affect value or safety.

Question 15

What is a counter-offer?

Answer 15

Written addendum modifying a prior offer; creates a single evolving contract, not a brand-new one.

Question 16

Signature/initials requirement.

Answer 16

All legally competent parties must sign; multi-page contracts often require initials on each page to confirm review.