Tennessee Realtor State Practice Exam

Which item is typically included in a residential purchase and sale agreement but not in a commercial one?

1. Seller responsibilities regarding disclosures about property condition.

2. Contingency clauses.

3. Financing terms.

4. Closing date and location.

The correct answer is: Seller responsibilities regarding disclosures about property condition.

A residential purchase and sale agreement typically includes specific seller responsibilities regarding disclosures about property condition, which is crucial in protecting the buyer from unexpected issues that may arise after the sale. This requirement stems from the need to inform buyers of any existing problems or conditions that could affect their decision to purchase the property. In commercial transactions, however, the expectation regarding property condition disclosures is less standardized, and the responsibilities may vary significantly based on the negotiation between the parties. Buyers in commercial real estate are often expected to conduct their own due diligence regarding the property’s condition and are generally more experienced in assessing risks associated with the purchase. The other items listed, such as contingency clauses, financing terms, and closing date and location, are common elements found in both residential and commercial agreements. Their presence is driven by the specific terms negotiated between the parties, irrespective of whether the property is residential or commercial.