California Real Estate Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Master the California Real Estate Exam with our comprehensive practice quiz. Get expert tips, detailed content review, and insider strategies to pass on your first try.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What happens to the deposit funds if an offer to purchase is not accepted by the seller?

The funds are temporarily held until a new offer is made
The seller keeps the deposit as compensation
The funds are returned to the buyer
The funds are forfeited to the state

The correct answer is: The funds are returned to the buyer

If the offer is not accepted by the seller, the funds are generally returned to the buyer. This is because the deposit serves as a good faith deposit, showing the buyer's seriousness and commitment to purchasing the property. The deposit serves as a form of protection for the seller in case the buyer backs out of the deal without a valid reason. In this scenario, since the offer was not accepted and the deal did not proceed, it is only fair for the funds to be returned to the buyer. Option A is incorrect because the funds are not held until a new offer is made; they are returned to the buyer. Option B is also incorrect because the deposit is not used as compensation for the seller, unless there is a valid reason for the buyer backing out and the contract states that the deposit is non-refundable. Option D is incorrect because the state does not have any claim to the deposit; it is solely between the buyer and seller.