Tennessee Real Estate Exam Practice Question
After a buyer's inspection contingency period has expired the buyer demands that the seller make extensive repairs or the buyer will cancel. The seller refuses. The earnest money is being held in the broker's trust account. What should the broker do?
Correct Answer: D
Rationale: In this scenario, refusing to release the earnest money is appropriate because the buyer did not fulfill the terms of the inspection contingency, which has expired. The seller's refusal to make repairs does not justify the buyer's demand, as the contract obligations were not met.
Option A is incorrect because releasing the earnest money to the seller without proper justification could be seen as a breach of fiduciary duty. Option B lacks the necessary consent from the buyer, as they have not agreed to forfeit the earnest money. Option C is also incorrect, as verbal approval is insufficient; written consent is typically required for such transactions.
Unlock All Questions
Subscribe to Premium for full access to all practice questions, detailed rationales, and performance tracking.
Subscribe Now