hard · National Real Estate Exam
A buyer and seller enter into a valid written purchase agreement. Two weeks before the scheduled closing, the house is destroyed by a fire.
Under the common-law doctrine of equitable conversion, who typically bears the risk of loss, and why?
- The seller, because they still hold legal title to the property until the deed is delivered.
- The buyer, because they acquired equitable title the moment the contract was signed.
- Both parties equally, as the contract remains executory and neither holds full ownership.
- The insurance company, because the contract is automatically voided by the destruction of the improvements.
Sign up free to see the explanation and track your rank →
More National Real Estate Exam practice
- A broker's employment contract with a seller is officially called the:
- What is the current status of the contract?
- A buyer defaults on a purchase agreement, and the seller chooses to keep the earnest money
- A buyer makes a written offer to a seller. Two days later, before the seller has responded
- A contract for the sale of a property is signed. Before closing, the property is destroyed
- A contract for the sale of real estate that has been signed by both parties is valid, but
- A contract that is valid and binding but allows one party to avoid the agreement because o
- A contract that is valid and enforceable until it is canceled by a party who was a victim