Wisconsin Real Estate Sales Practice Exam

In what situation would a buyer typically benefit from an interest-bearing account?

1. When the property is sold quickly

2. When earnest money is held in an interest-bearing account

3. When closing costs are decreased

4. When the broker charges lower commissions

The correct answer is: When earnest money is held in an interest-bearing account

A buyer typically benefits from an interest-bearing account when earnest money is held in such an account. This situation is advantageous because the earnest money, which is essentially a deposit made to demonstrate the buyer's serious intent to purchase the property, can accrue interest over the period that it is held. At closing, the buyer could receive the interest earned, which effectively increases the value of the initial deposit. The other options do not provide inherent benefits of an interest-bearing account for the buyer. Selling a property quickly may not impact the financial aspects related to an interest-bearing account. Decreased closing costs, while beneficial to the buyer, do not tie directly to the use of an interest-bearing account. Similarly, lower commission fees charged by the broker do not correlate with the benefits of holding earnest money in an interest-bearing account, which specifically addresses the financial advantages of the deposit itself.