Real Property Multistate Bar Practice Exam

The correct answer highlights the potential consequences of not effectively utilizing the escrow period in a real estate transaction. During escrow, the buyer typically has the opportunity to conduct inspections, review documents, and address any issues that arise before the finalization of the sale. If the buyer fails to take meaningful action during this period, they could inadvertently waive their right to rely on certain implied warranties concerning the condition of the property.

Implied warranties generally guarantee that the property is fit for habitation and free from major defects at the time of sale. If a buyer does not diligently use the escrow period to investigate the property or to raise concerns, they may lose the ability to claim that the property has defects or that the seller failed to disclose important information. This forfeiture of rights can significantly affect the buyer's ability to seek legal remedies or negotiate repairs after the sale is complete.

In contrast, losing a deposit, being unable to sue for damages, or incurring additional fees are outcomes that are typically associated with other failures in the transaction process, such as failing to meet deadlines for contingencies or decisions during escrow. However, the specific risk of waiving implied warranties directly relates to the effectiveness of the buyer's actions during the escrow period, making it a critical issue to understand in