Alabama Real Estate Practice Exam

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Prepare for the Alabama Real Estate Exam. Utilize flashcards and multiple-choice questions, each coupled with hints and explanations. Ace your upcoming test!

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Which of the following best defines a credit in real estate transactions?

Financial advice given by the real estate agent
An evaluation of loan worthiness
Money paid by one party to the other
A fee for processing the loan application

The correct answer is: Money paid by one party to the other

In real estate transactions, a credit is defined as money paid by one party to the other. This is usually done to cover expenses or to offset the purchase price. Option A is incorrect because financial advice is not considered a credit in a real estate transaction. Option B is incorrect because an evaluation of loan worthiness is not a transaction in and of itself. Option D is incorrect because a fee for processing a loan application is not considered a credit, but rather a fee for service.