Contracts, Transfer, and Escrow Practice Question

Question

An investor is comparing two properties involving risk of loss. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 100)

Answer choices

1. A. It allows a salesperson to act independently of the responsible broker.
2. B. It shifts all responsibility to escrow and eliminates the broker’s duties.
3. C. It makes oral promises enforceable in every real estate transaction.
4. D. Recognize contract allocation and insurance considerations before closing.

Correct Answer

D. Recognize contract allocation and insurance considerations before closing.

Explanation

The correct answer is D because risk of loss requires candidates to recognize contract allocation and insurance considerations before closing. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.

Question details

• Difficulty: hard
• Domain: Contracts, Transfer, and Escrow
• Objective: risk of loss

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