Florida Real Estate Practice Exam

In a purchase offer, is earnest money required to have a binding contract?

1. No, because earnest money isn't part of a sales contract.

2. No, because the buyer's consideration is the promise to buy.

3. Yes, because it opens escrow.

4. Yes, because it's the buyer's consideration.

The correct answer is: No, because the buyer's consideration is the promise to buy.

Earnest money is not required to have a binding purchase contract as it is not a necessary element for a legally binding agreement. The buyer's consideration in a purchase offer is the promise to buy, not the earnest money. Although earnest money may be used to show good faith and secure the property during the escrow process, it is not required to have a binding contract. Therefore, options A and C are incorrect. Option D implies that earnest money is the only form of consideration in a purchase offer, which is not true. B is the correct answer because it accurately reflects the necessary elements for a binding purchase contract.