Indiana 90-Hour Broker Course Practice Exam – Prep & Study Guide

The correct choice centers around the buyer terminating the sale after an appraisal comes in low, which could result in the earnest money being disbursed to the seller depending on the circumstances outlined in the purchase agreement. If the contract specifies that the buyer is required to proceed with the sale regardless of the appraisal outcome, and the buyer chooses to walk away based on the low appraisal, this could be deemed a breach of contract. As a result, the seller may be entitled to keep the earnest money as compensation for the inconvenience and potential loss of other buyers.

This scenario is contingent upon the terms agreed upon in the purchase agreement regarding appraisals and the buyer's ability to terminate based on financing or appraisal issues. In many contracts, buyers have certain contingencies that may protect their earnest money if they back out due to a low appraisal; however, if the terms bound them to proceed and the buyer fails to do so, disbursement to the seller is plausible.

In contrast, the other scenarios presented do not align with the automatic disbursement of earnest money to the seller. If the seller simply accepts the offer with no conditions or contingencies on the buyer's part, then the earnest money generally stays with the buyer until the closing process, provided all conting