Maryland Home Improvement PSI Practice Exam

What is a written agreement confirming a buyer and seller's intentions called?

1. An agency

2. An assessment

3. A contract

4. A fiduciary obligation

The correct answer is: A contract

A written agreement confirming a buyer and seller's intentions is referred to as a contract. A contract is a legally binding agreement that outlines the terms and conditions agreed upon by the parties involved. It typically includes important details such as the rights, responsibilities, and obligations of each party, as well as any terms related to payment, timelines, and conditions for closure. Contracts play a fundamental role in real estate transactions by ensuring clarity and providing legal protection for both buyers and sellers. By documenting the agreed-upon intentions in writing, a contract helps prevent misunderstandings and disputes that may arise during the transaction process. In contrast, agency refers to the relationship between a principal and an agent acting on their behalf, but it does not inherently confirm intentions regarding a transaction. Assessment typically pertains to the evaluation of property value or condition, rather than the agreement between parties. A fiduciary obligation describes the responsibility one party has to act in the best interest of another, especially in a relationship of trust, but it does not serve as a tool for confirming a buyer and seller's joint intentions.