California Real Estate Practice Exam

A purchaser of a home could not complete a legal contract because of which of the following?

1. did not have sufficient cash for down payment and costs

2. is not a citizen

3. is not yet "of age" (is 17 years old)

4. none of the above

The correct answer is: did not have sufficient cash for down payment and costs

The ability to enter into a legal contract is determined by several factors, including financial capability and legal capacity. In this scenario, the reason a purchaser might not be able to complete a legal contract is related to financial capability, specifically the lack of sufficient cash for a down payment and costs associated with purchasing a home. In real estate transactions, a buyer must often provide a down payment and cover closing costs. If the purchaser does not have enough funds to meet these financial obligations, it effectively hinders their ability to proceed with the transaction. Real estate contracts typically require that a buyer demonstrates financial viability to ensure that they can fulfill the terms of the agreement. While age and citizenship can affect the legal capacity to contract, these factors do not directly equate to an inability to complete the transaction as financial shortfalls do. For instance, a 17-year-old may need a guardian's consent to enter into a contract, but this does not automatically negate their interest in buying a home; rather, it may simply require additional steps to validate the contract. Similarly, non-citizens can enter into contracts in many situations, especially if they possess the necessary legal presence in the country. Therefore, the most straightforward and compelling reason from the options provided that would prevent