Contracts

property and put the listing in the multiple listing service. The broker should: nis wife was out of town. The husband instructed the broker to immediately advertise the A broker was listing a property owned by a married couple. The husband signed the listing but A. follow the seller's instructions because the broker has the duty of obedience. B. tell the husband that they will start marketing the property after obtaining the signature of the wife. C. start advertising the property and get the wife's signature later. D. refuse the listing because this would be considered a net listing.

B.

A broker has done a proper CMA and discusses the probable market value of the property with the seller. The seller insists on listing the property for an unrealistic price. In this situation all of the following statements are true EXCEPT? A. The broker can suggest the seller have a formal appraisal done. B. The broker may take the listing with the understanding that price reductions may be needed. C. The broker must take the listing at the proposed seller's price. D. The broker may decline to take the listing at the high price.

C.

licensee should be sure that the subsequent offer contains a contingency. If it does not, the When an offer to purchase is made on a property on which a sales contract already exists, the licensee should: A. advise the seller to reject the offer and make a counteroffer including such a clause. B. not present the offer to the seller. C. advise the seller to accept it and write in such a clause. D. advise the seller to accept the new offer and cancel the existing contract.

A.

sales agent listed a property described as the NW 4 of the SW 4 of Section 12 for $110.000 The property sold for $2,500 an acre. The listing broker and the sales agent agreed to split 6% commission 50-50. How much would the sales agent be paid? A. $3,000 B. $3,300 C. $6,000 D. $6,600

A.

A buyer enters into a real estate contract to purchase a parcel of residential property. Several days later, the broker is informed that the buyer had been adjudged mentally incompetent four years ago. Is the contract valid? A. Yes, mental incompetency will not discharge the buyer's obligation. B. Yes, the statute of limitations has expired. C. No, because the buyer is mentally incompetent the contract is void. D. No, a mentally incompetent buyer cannot sign a real estate contract.

C.

A buyer includes earnest money as part of an offer to purchase property with the understanding the earnest money would be returned if the buyer is unable to qualify for a loan. Which of the following clauses should be included in the offer to reflect the buyers request? A. "As is" clause. B. "Time is of the essence" clause. C. Mortgage contingency clause. D. Property sale contingency clause.

C.

A buyer signs an offer to purchase for $250,000 that requires the refrigerator remain with the property. The seller agrees to the price, but removes the stipulation about the refrigerator. The seller initials the change and signs the document. Which of the following is true? A. The offer has been signed by both parties and is considered a binding contract. B. The seller does not have the right to change the original offer. C. The original offer by the buyer is terminated and the seller has created a new counteroffer. D. If the buyer rejects the seller's offer, the seller can accept the buyer's original offer.

C.

A contract for the sale of real estate that does not state the consideration to be paid for the property and is not signed by the parties is considered to be: A. voidable. B. executory. C. void. D. enforceable.

C.

A land contract would be useful in which of the following situations? A. When money is available and the buyer has good credit. B. When the buyer can qualify for conventional financing. C. In a tight money market where it is difficult to qualify the buyer for conventional financing. D. The seller needs all cash at closing.

C.

A minor signed a written sales contract to purchase a parcel of property from an adult seller. After the contract was signed the minor declared the contract void. Is the buyer's action permissible? A. No, both the buyer and seller would have to agree to void the contract. B. No, in this situation only the seller could void the contract. C. Yes, the contract is voidable by the minor while under age and for a certain period of time after reaching legal age. D. Yes, the buyer violated the Statute of Frauds by not disclosing their age.

C.

A prospective buyer of real estate gives a broker a cash deposit with an offer to purchase as evidence of their intention to complete the transaction. This deposit is known as: A. down payment and the amount must be at least 10% of the sales price. B. down payment and refunded when the contract is agreed upon by both parties. C. earnest money and the amount is negotiated between the parties. D. earnest money and is essential to make a purchase agreement binding.

C.

A seller's house is listed by a broker for $135.000. The broker found a buyer who made an offer for $130,000, which the seller did not accept. This would be an example of a(n): A. option agreement. B. counter offer. C. rejected offer. D. sales contract.

C.

A written agreement giving the agent the right to collect a commission no matter who buys the property within the term of the agreement is known as an: A. exclusive listing. B. exclusive agency listing. C. exclusive right to sell listing. D. open listing.

C.

A. he broker's action are permissible B. After the first offer was received, the broker salespeople. additional offers would be accepted until the seller decided on the offer. should have told the salespeople that no provided the commission is split between the two C. The broker has no authority to withhold any offers from the seller. into a negotiating battle over two D. The broker was smart to protect the seller from getting offers.

C.

If a seller refuses to sell to a buyer under an enforceable contract of sale, the buyer can request a court to enforce the contract and make the seller deed the property. This action would be a: A. suit to partition. B. suit for damages. C. suit for specific performance. D. rescission.

C.

If the buyer defaulted some time ago on a written contract to purchase a seller's real estate, the seller can still sue for damages if he is not prohibited from doing so by the: A. statute of frauds. B. law of agency. C. statute of limitations. D. broker-attorney accord.

C.

In an option agreement the purchase price at which the property would be sold must be established: A. at closing. B. when the option is exercised. C. when the option agreement is created and signed. D. anytime during the option period.

C.

To assign a contract for the sale of real estate means to: A. record the contract with the county recorder's office. B. permit another broker to act as agent for the principal. C. transfer one's rights under the contract. D. allow the seller and the buyer to exchange positions.

C.

Under a land contract (contract for deed) the seller retains what type of title? A. Severalty. B. Joint tenancy. C. Legal. D. Equitable.

C.

Which of the following best describes a voidable contract? A. A contract that has no legal effect and never had any. B. An oral contract with no witnesses to the agreement. C. A contract that may be either affirmed or disaffirmed acceptance has not been communicated to the by one of the parties. D. An offer that has been accepted but the offeror.

C.

Which of the following gives the best evidence of the buyer's intention to carry out the terms of the real estate purchase contract? A. The "subject to" clause. B. The agreement to seek mortgage financing. C. The earnest money deposit. D. The provision that "time is of the essence".

C.

Which of the following statements about the statute of frauds is TRUE? A. It protects the purchaser against unknown liens on the property. B. It requires that monetary consideration accompany offers to purchase to ensure serious intent. C. It requires that a sales contract for real property be in writing to be enforceable. D. It is used to prevent people from selling property that they do not own.

C.

Which of these situations would render a contract void? A. A landlord and tenant entered into a verbal lease for six months. B. A buyer purchased a property and the seller committed fraud on the property disclosure statement. C. A listing contract for commercial property was signed by the company CEO who was not authorized under the article of incorporation. D. A sales contract is contingent upon a property inspection.

C.

the following would BEST describe the listing agreement? A seller entered into a written exclusive right to sell listing contract with ABC Realty. Which oA A. It is an implied, unilateral, executed contract. B. It is an implied, bilateral, executory contract. C. It is an expressed, bilateral, executory contract. D. It is an expressed, bilateral, executed contract.

C.

Baird submits an offer to buy a house, giving the seller 24 hours in which to make a decision. Under which of the following circumstances would a contract be created? A. The seller waits more than 24 hours before deciding to accept the offer. B. The seller resubmits the offer to Baird with the seller's initials next to a new proposed closing date. C. The seller accepts the offer only to discover that Baird has just died. D. The seller accepts Baird's offer as presented and notifies him of the acceptance within the time specified.

D.

Breach of contract is refusal or failure to comply with the terms of a contract. If the seller breaches the purchase contract, the buyer may do all of the following EXCEPT: A. sue the seller for specific performance. B. rescind the contract and recover the earnest money. C. sue the seller for damages. D. sue the broker for non-performance.

D.

If, upon the receipt of an offer to purchase his property subject to certain conditions, the seller makes a counteroffer, the prospective buyer is: A. bound by his original offer. B. bound to accept the counteroffer. C. bound by whichever offer is lower. D. relieved of his original offer.

D.

In Georgia, when securing a brokerage engagement the licensee must furnish each person signing a true copy: A. at the closing. B. when the deed is recorded. C. when requested by the parties. D. when securing the brokerage engagement.

D.

The legal proceeding or legal action brought by either the buyer or the seller under a purchase contract to enforce the terms of the contract is known as: A. an injunction. B. a lis pendens. C. an attachment. D. specific performance.

D.

The safety (protection) clause in an exclusive right to sell listing protects the broker's commission rights for what time period after expiration of the listing? A. Thirty (30) days, as stated by law. B. Ninety (90) days, which is standard in all listings. C. The same amount of time as the listing contract. D. A reasonable period of time negotiated between broker and principal.

D.

Under the provisions of an option to purchase real property, the optionee has: A. the right to buy the property at a later date if the property is put up for sale by the owner. B. legal title to the optioned property. C. the right of possession in the optioned property. D. the irrevocable right to purchase the property at a fixed price for a specified period of time.

D.

When a prospective buyer makes a written purchase offer that the seller accepts, then the: A. buyer may take possession of the real estate. B. seller grants the buyer possessory rights. C. buyer receives legal title to the property. D. buyer receives equitable title to the property.

D.

When an offer to purchase has been signed by all parties a licensee is required to deliver a signed copy of the purchase agreement to: A. the seller. B. the purchaser. C. the lender. D. the purchaser and seller.

D.

Which of the following contracts would be considered a unilateral agreement? A. A lease for over six months. B. An exclusive listing for six months. C. A sales contract closing in six weeks. D. An option agreement which expires in six months.

D.

Which of the following is NOT an essential element of a valid real estate sales contract? A. Consideration B. Competent parties C. Offer and acceptance D. Earnest money

D.

Which of the following is an example of a unilateral agreement? A. A lease for over six months. B. An exclusive listing for six months. C. A sales contract closing in six weeks. D. An option agreement which expires in six months.

D.

buyers at the same time. estate agent. The agent advertises What is the the property best advice the agent could as a "great value" and receives two offers from different An owner listed their property for sale with a real give the owner regarding the two offers? A. Accept both offers. B. Reject both offers. C. Counteroffer to both buyers. D. Accept or counteroffer one offer or reject both offers.

D.

certified check for 5% of the purchase price as earnest A salesperson of broker Baird obtained a signed offer to purchase money. What should the salesperson do a seller's property along with a with the earnest money check? A. Give it to the seller. B. Hold it until closing. C. Deposit the check in the salesperson's personal account. D. Give it to broker Baird for deposit in the brokerage trust account.

D.

The broker receives an earnest money deposit with a written offer to purchase that includes a ten-day acceptance clause. On the fifth day, before the offer is accepted, the buyer notifies the broker that she is withdrawing the offer and demands the return of her earnest money deposit. In this situation: A. the buyer cannot withdraw the offer because it must be held open for the full ten days. B. the buyer has the right to revoke the offer at any time until it is accepted and recover the earnest money. C. the seller and the broker have the right to each retain one-half of the deposit. D. the broker declares the deposit forfeited and retains it for his services.

B.

The concept that requires a party to bring an action within a specific period of time to enforce their rights is: A. a variance. B. the statute of limitations. C. the statute of frauds. D. a waiver.

B.

The essential elements of a contract include all of the following EXCEPT: A. offer and acceptance. B. notarized signatures. C. competent parties. D. consideration.

B.

The interest a buyer has in real estate once a purchase agreement has been accepted and signed, but not closed, is called: A. simple interest. B. equitable title. C. legal title. D. adjustable interest.

B.

The law that requires real estate contracts to be in writing to be enforceable is the: A. law of descent and distribution. B. statute of frauds. C. parol evidence rule. D. statute of limitations.

B.

The legal remedy of terminating a contract and restoring the parties to their original position prior to contract is called: A. default. B. rescission. C. forfeiture. D. assignment.

B.

The provision in a listing agreement that gives additional authority to the broker and obligates the broker to distribute the listing to other brokers is a(n): A. joint listing clause. B. multiple listing clause. C. net listing clause. D. open listing clause.

B.

The substitution of a new contract in place of the original contract is considered: A. assignment. B. novation. C. rescission. D. consideration.

B.

The transfer of rights and/or duties under a contract is called: A. novation. B. assignment. C. specific performance. D. offer and acceptance.

B.

Under an option agreement the optionee: A. is obligated to purchase the property at the fixed price. B. must pay the optionor valuable consideration. C. will take possession of the property. D. must include a down payment.

B.

Under what conditions would a buyer be MOST LIKELY to sue for specific formance? A. If the seller had neglected to inform the buyer that the property to be purchased was a dominant tenement. B. If the seller defaulted on the signed sales contract before closing. C. If the broker had misrepresented the size of the lot to be purchased. D. If the broker has misrepresented the nearness of fire protection to the property to be purchased.

B.

What action returns a contract's narties to their position before the contract, including return of any deposit? A. Cancellation. B. Rescission. C. Substitution. D. Subordination.

B.

When an offer to purchase has been accepted and signed by all parties, the licensee is obligated to deliver a signed copy of the purchase agreement to: A. purchaser, seller and lender. B. purchaser, seller and broker(s). C. purchaser, lender and broker(s). D. seller, lender and broker(s).

B.

When the phrase "time is of the essence" is used in a contract, generally it refer to: A. the acceptance of an offer by the offeree within a reasonable time. B. punctual performance is an essential requirement of the contract. C. the duration of time in which a party may sue under the statute of limitations. D. payment of earnest money.

B.

Which of the following statements BEST describes the difference between a bilateral and unilateral contract? A. The number of promises involved. B. The number of parties promising to perform. C. The number of parties involved. D. The dollar amount of the transaction.

B.

agreement was put in writing it stated the buyer would pay all closing costs. If both the seller A buyer and seller have a verbal agreement stating the seller will pay all closing costs. When the and buyer sign the agreement, who would most likely be responsible for the closing costs? A. Seller. B. Buyer. C. Lender. D. Broker.

B.

buyer could not obtain a loan. This clause is called a(n): $500 earnest money with a clause that the A buyer made an offer earnest money would be returned if the on a property and included A. option... B. mortgage contingency. property sale contingeney. D. binder.

B.

In order for a contract to be valid, the offeree must accept before: A. the payment of any money. B. the offer expires. C. the close of the 10th business day following the offer. D. the offeror makes a similar offer to a third party.

B.

Money that serves to compensate a seller in the event of a buyer default is known as: A. actual damages. B. liquidated damages. C. escrow funds. D. earnest money.

B.

Predetermined damages agreed to by the parties in a sales contract should either party breach the agreement is referred to as: A. earnest money. B. liquidated damages. C. down payment. D. security deposit.

B.

The Georgia Real Estate Commission prohibits a broker from accepting which of the following types of listings? A. open B. net C. exclusive agency D. exclusive-right-to-sell

B.

The amount of earnest money deposit is determined by: A. the real estate licensing statutes. an agreement between the parties. C. the broker's office policy on such matters. D. the acceptable minimum of 5 percent of the purchase price.

B.

*he nquidated damages" in a sales contraet if the buver defaults is MOST LIKELY the: A. earnest money. B. real estate commission. C. sales price. D. loan amount.

A.

3-18. A verbal agreement for the sale of a parcel of real estate would be considered: A. an unenforceable contract. B. an enforceable contract. C. a void contract. D. a voidable contract.

A.

A broker listed a seller's property for $150,000. The buyer signed an offer for the full listed price and gave the seller three days to accept. Two days later the seller had not yet accepted. Regarding this situation, which of the following is TRUE? A. The buyer can withdraw the offer anytime before acceptance. B. The buyer must wait three days before the offer can be withdrawn. C. The seller must accept the offer because it is for the full listed price. D. The seller can accept the offer after three days.

A.

A clause in a contract that permits the seller to keep the earnest money deposit if the buyer defaults is called the: A. liquidated damages clause. B. "time is of the essence" clause. C. contingency clause. D. escape clause.

A.

A fifteen year old minor signs a sales contract to purchase real property. Can the minor rescind the contract after becoming an adult? A. Yes, up to the age of majority and a reasonable time after attaining majority. B. Yes, only with the consent of the seller. C. No, only the seller may void the contract. D. No, the contract is valid and enforceable.

A.

A licensee is asked by a buyer to prepare a sales contract that will have no earnest money. According to the law and the rules of the Commission, can a licensee help negotiate a contract without earnest money? A. Yes, because neither the law nor the Real Estate Commission require the purchaser to pay earnest money. B. Yes, because the seller cannot reject an offer solely based on the amount of the earnest money. C. No, because it is illegal for a licensee to present an offer for which there is no earnest money. D. No, because Georgia law establishes earnest money as one of the essential elements of an enforceable real estate sales contract.

A.

A provision placed in a contract that requires the completion ofa certain act before the contract is binding is called: A. a contingency clause. B. a novation clause. C. an addendum clause. D. a proration clause.

A.

A purchaser made an offer contingent on the sale of her current home. Would this result in a contract? A. Yes, if it is agreed to by both parties. B. Yes, if the purchasers house sells within 30 days. C. No, a contingency cannot be made part of a contract. D. No, property sale contingencies are not legal and will void a contract.

A.

A seller accepted an offer on her home at a price much lower than she had been asking. If she was under duress when she accepted the offer, the contract is: A. voidable. B. void. C. valid. D. unenforceable.

A.

A seller agreed in writing to sell a portion of his land to his neighbor. Both signed the contract and agreed the closing would take place in three months. Later, the seller decided he didn't want to sell the land and refused to transfer the property. Would the buyer have any recourse against the seller? A. Yes, the buyer could enforce the contract in the courts. B. Yes, the seller violated the statute of frauds. C. No, the seller has a 90 day right of rescission in a sales contract. D. No, the contract was implied and unenforceable.

A.

A. The contract is voidable. B. The contract is void. C. The contract lacks reality of consent. D. The contract is fully valid and enforceable.

A.

All of the following are typical provisions in a listing agreement EXCEPT: A. the closing date of the sale. B. the names of the seller and broker. C. the legal description of the property. D. the commission rate to be paid to the broker.

A.

An adult buyer who is illiterate signs a contract to purchase property from a seller. The buyer understands the nature of the contract because the terms were explained orally. Is the contract binding? A. Yes, because the buyer understands the terms of the contract. B. Yes, because all adults are considered legally competent. C. No, because the buyer is illiterate and, therefore, legally incompetent. D. No, because a guardian must sign for the buyer.

A.

An owner signs an exclusive right to sell listing agreement with ABC Realty. This contract is BEST described as a(n): A. bilateral personal service contract that hires a brokerage to find a ready, willing and able buyer. B. bilateral employment contract that creates a customer status with the owner. C. unilateral employment contract that can be breached by either party without liability. D. bilateral personal service contract that allows the owner to sell the property and not pay ABC Realty a commission.

A.

The state law that requires real estate contracts to be in writing and signed by the parties to be legally enforceable is the: A. statute of frauds. B. anti-trust laws. C. Federal Fair Housing Law. D. statute of limitations.

A.

In a counteroffer the: A. offeror receives the offer. B. offeror makes the offer. C. original offer is accepted. D. offer must be in writing.

B.

A bilateral contract is one in which: A. only one of the parties is obligated to act. B. the promise of one party is given in exchange for the promise of the other party. C. something is to be done by one party only. D. a restriction is placed in the contract by one party to limit the performance by the other.

B.

A broker took a listing and later discovered that the client was previously declared legally incompetent. The listing is now: A. binding because the broker was acting as the owner's agent in good faith. B. of no value to the broker because it is now void. C. the basis for the recovery of a commission if the broker produces a buyer. D. renegotiable.

B.

A buyer made an offer to a seller for $125,000 provided the seller would have the house painted. The seller agreed to the $125,000 but would not have the house painted. This would constitute: A. a contract with a contingency. B. a rejected offer and a counter offer by the seller. C. an executed agreement. D. an option.

B.

A buyer makes an offer to a seller agreeing to all the terms in the listing agreement. Would this result in a valid contract between the buyer and seller? A. No, because there was no acceptance by the broker. B. No, because there was no acceptance by the seller. C. Yes, all the terms of the listing were met by the buyer. D. Yes, because the broker would be entitled to a full commission.

B.

A buyer signed a contract with a builder to complete a house within one year. Until the house is completed the buyer's contract with the builder is: A. executed. B. executory. C. unilateral, D. implied.

B.

A contract in which a broker is employed by an owner to find a buyer for a twenty year old apartment building is MOST LIKELY a(n): A. option contract B. listing contract C. property management contract D. sales contract

B.

A contract must include the purchase price and method of payment, including the amount of earnest money, if any. If no definite purchase price exists, the contract: A. purchase price would be established by the lender's appraisal. B. must clearly establish the criteria for calculation of the price. C. purchase price would be the same as the listing price. D. purchase price would be established at closing.

B.

A contract that has all the essential elements and is legally enforceable is considered: A. unenforceable. B. valid. C. void. D. voidable.

B.

A lease agreement is signed by a lessee who is 16 years of age. Which of the following is true? A. A 16-year-old person cannot sign a lease. B. The lease agreement is voidable. C. The lease agreement is valid provided the security deposit is increased. D. The lease agreement is void.

B.

A nusband and wife list a property owned jointly by both of them. While the husband is out of town, the wife receives an offer on the property. If the wife wants to accept the offer, she could sign for her husband if: A. they hold the ownership as community property. B. she had been granted power of attorney by her husband. C. the signature is notarized. D. she holds more than a 50% interest in the property.

B.

A seller accepts an offer from a buyer on a listed parcel of residential property. Before the closing, the property is rezoned commercial and due to the increase in value, the seller refuses to sell. The buyer's BEST course of action would be to: A. renegotiate the contract at a higher price. B. enter a suit for specific performance against the seller. C. rescind the contract. D. enter a suit for damages against the seller's broker.

B.

A void contract is one that is: A. not in writing. B. not legally enforceable. C. rescindable by agreement. D. voidable by only one of the parties.

B.

All of the following are typically found in a listing agreement EXCEPT: A. The price the seller is asking for the property. B. The date the broker will schedule an open house. C. The commission rate to be paid to the listing broker. D. The responsibility of the broker.

B.

An executed contract is one in which: A. the title has been recorded. B. all obligations have been performed. C. the deed has been acknowledged. D. approval has been given by the courts.

B.

At the time a buyer was negotiating the purchase enough to support the construction of a building when, in of a lot on which to build a new home, the seller represented that the soil was firm fact, the seller knew it was not. This contract is: A. void. B. voidable by the buyer because of fraud. C. voidable by the seller because of the mistake. D. voidable by neither party because no harm was done yet.

B.

During the period of time after a real estate sales contract is signed, but before title actually passes, the status of the contract is: A. voidable. B. executory. C. unilateral. D. implied.

B.

In Georgia, each exclusive brokerage engagement must have a: A. security deposit. B. definite expiration date. C. closing date. D. 90 day broker's protected period.

B.

withdraws the counteroffer and buyer counteroffers accepts the original offer of $12,000. Under these conditions: to buy for $10,500. On Friday, the buyer On Monday, the seller offers to sell his vacant lot to the buyer for $12,000. On Tuesday, the A. there is a valid agreement because the buyer accepted the seller's offer exactly as it was made. seller's offer and once it was rejected, it cannot be accepted later. B. there is not a valid agreement because the buyer's counteroffer was a rejection of the C. there is a valid agreement because the buyer accepted before the seller advised the buyer that the offer is withdrawn. D. there is not a valid agreement because the seller's offer was not accepted within 72 hours.

B.

A broker has an exclusive-right-to-sell listing on a building. The owner is out of town when the broker gets an offer from a buyer to purchase the building providing the seller agrees to take a purchase money mortgage. The buyer must have a commitment from the seller before the seller is scheduled to return to the city. Under these circumstances the: A. broker may enter into a binding agreement on behalf of the seller. B. broker may collect a commission even if the transaction falls through because of the seller's absence from the city. C. the buyer is obligated to keep the offer open until the seller returns D. the broker must obtain the signature of the seller to effect a contract.

D.

A broker obtaining an exclusive listing from a seller would NOT need to include: A. a legal description. B. an expiration date. C. a listed price. D. a home warranty program.

D.

A contract is said to be bilateral if: A. one of the parties is a minor. B. the contract has yet to be fully performed. C. only one party to the agreement is bound to act. D. all parties to the contract exchange binding promises.

D.

A purchaser in a real estate sales contract transfers her right to buy the property to another person This would be considered: A. a breach of contract. B. an assumption. C. a novation. D. an assignment.

D.

All of the following will terminate an offer EXCEPT: A. withdrawal of the offer before acceptance. B. death of the offeror before acceptance. C. a counteroffer by the offeree. D. an additional offer from a third party.

D.

An offer does not contain a specjific expiration date, Unless withdrawn, the courts will usually declare that the offer should remain open for: A. 10 days. B. 30 days. C. 90 days. D. a reasonable time.

D.