Michigan Real Estate Exam Practice Question
What amount of earnest money is required to make a purchase agreement enforceable?
Correct Answer: D
Rationale: In real estate transactions, any valuable consideration—such as earnest money—can make a purchase agreement enforceable, regardless of the amount.
Option A incorrectly specifies percentages for earnest money based on financing types, which isn't a universal requirement.
Option B suggests that no earnest money is necessary for cash purchases, which is misleading; while cash transactions may have different norms, a purchase agreement can still be valid with or without earnest money.
Option C states that no set dollar amount is required, which is partially true but does not recognize that valuable consideration, in any form, is essential for enforceability.
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