PSI Virginia Real Estate Practice Exam

Which of the following is NOT a requirement for a valid home purchase agreement?

1. It must be in writing

2. It must include an offer and acceptance

3. It must have a high sale price

4. It must entail a legal purpose

The correct answer is: It must have a high sale price

A valid home purchase agreement requires certain elements to ensure enforceability and legal protection for all parties involved. The requirement that it must include an offer and acceptance ensures that both the buyer and seller have reached mutual agreement on the terms of the sale, which is fundamental to contract formation. Additionally, the stipulation that the agreement must be in writing is mandated by the Statute of Frauds, which aims to prevent fraudulent claims and provides a tangible reference for the terms agreed upon. Furthermore, a legal purpose ensures that the contract adheres to legal standards and does not involve illegal activities. Without a lawful objective, the agreement cannot be deemed valid. Conversely, a high sale price is not a requirement for a valid contract. The price can vary widely based on market conditions, property value, and negotiations between the buyer and seller. Thus, while the other elements focus on the structure and legality of the agreement, the sale price is a negotiable term and not a prerequisite for the agreement’s validity. This understanding of contract principles is essential for anyone involved in real estate transactions.