Fina 382 Chapter 8

An earnest money agreement signed by all parties is a. binding on the seller. b. a binding contract on the seller only if it is full price and the terms of the listing agreement are met. c. revocable by the buyer for 72 hours. d. only binding on the buyer.

A

An option is given wherein consideration is stated as $10.00. The option is a. valid. b. invalid for lack of sufficient consideration. c. void. d. unenforceable.

A

The process of dividing ongoing expenses and income items as of the closing date is called a. prorating. b. "as is" basis. c. closing. d. arbitrating.

A

When buying property under a land sales contract, which of the following does the buyer receive immediately? a. Possession b. Title c. Encumbrances d. Estate in fee simple

A

A land sales contract passes a. the right to destroy the property. b. equitable title. c. legal title. d. no interest whatsoever.

B

If the vendee is in default, the vendor a. cannot pursue the right of foreclosure. b. is in title. c. no longer has equitable title. d. retains color of title.

B

Under a conditional land sales contract, a. legal title is held by the vendee. b. equitable title is held by the vendee. c. legal title is held by a trustee. d. equitable title is held by a trustee.

B

When a seller wishes to convey title by means of a statutory deed form, the salesperson a. can advise the seller which deed form to use. b. can advise seller to obtain the services of a lawyer. c. can advise the buyer which tenancy to use. d. can fill it out for the buyer.

B

Which of the following is true of a land sales contract? a. Beneficiary holds naked legal title b. Purchaser holds equitable title c. Vendee holds full legal title d. Mortgagor holds title

B

A valid enforceable sales agreement must a. contain the grantor and grantee's signatures. b. be accompanied by an earnest money deposit. c. be written and delivered. d. be written and mailed.

C

If title to real property remains in the seller's name after it is sold on an installment payment plan, the buyer would have purchased it under a. an FHA mortgage. b. a conventional mortgage. c. a contract for deed. d. a VA loan.

C

In a brokered real estate transaction, the amount of earnest money is determined by the a. buyer. b. seller. c. by agreement between the buyer and seller. d. by agreement between the buyer and broker.

C

The phrase "time is of the essence" means a. that the broker must present the offer quickly. b. that the transaction must close as soon as possible. c. that punctual performance of the time limits set by the contract is essential. d. little, since the phrase has no specific meaning.

C

The printed portions of a standard residential sales contract refer to all the following EXCEPT a. title insurance. b. liens. c. discount rates. d. closing date.

C

The seller decided that he didn't want to sell his house a few days before closing. He can a. simply not show up to sign the deed. b. return the earnest money deposit and declare the contract void. c. be sued by the buyer for specific performance and damages. d. can refuse to pay the broker a commission.

C

What should a salesperson do if he receives a second bona fide offer after one offer has already been submitted to the seller but not yet accepted or rejected? a. Allow the first purchaser to meet the second offer before submitting it b. Hold the second offer until a decision is made on the first offer c. Submit the second offer immediately d. Submit the second offer only if it is better than the first

C

When a property is optioned, the optionor is the a. buyer. b. vendor. c. owner. d. lessee.

C

A broker is preparing an original real estate sales contract for a buyer and seller. Whom may he lawfully charge for this service? a. Buyer b. Seller c. Buyer and seller d. No one

D

A purchase agreement for the purchase of real property is a. not necessary in a cash sale when the amount of earnest money paid equals the purchase price. b. a legally enforceable contract which is binding on the seller as soon as it is signed by the buyer if the price and terms of the listing agreement are met exactly. c. legally enforceable and binding on the buyer as soon as it is signed by him. d. enforceable when the seller signs it and the buyer is notified of the seller's acceptance.

D

A real estate licensee may advise sellers or buyers regarding which of the following? a. Which deed form to use b. How to take title c. Tax implications on the sale or purchase d. Choices of financing for the transaction

D

A real estate purchase agreement contract used by a multiple listing member may be all of the following EXCEPT a. receipt for earnest money. b. contract up to the date of closing. c. commission agreement between the seller and broker. d. statement of the buyer's costs.

D

An option to purchase real property is NOT a. a contract. b. covered by the statute of frauds. c. covered by real property laws. d. cancelable by the optionor.

D

At the time the expiration of an option to purchase, the optionee a. can request his deposit back. b. can renew the option or the same time period and terms. c. can repossess the property. d. forfeits his option money if he doesn't buy the property.

D

From the following, select the parties to a land sales contract. a. Lessor-Lessee b. Mortgagor-Mortgagee c. Grantor-Grantee d. Vendor-Vendee

D

Howard signed an option with Paula giving Paula the "right to purchase" in 90 days. Paula decided she did not want the property and did not exercise her option. Howard can a. sue for specific performance. b. sue for damages. c. sue for specific performance and damages. d. do nothing.

D

If a contract of sale is subject to the buyer's ability to secure a loan, and after diligent effort the buyer is unable to do so by the stated deadline, the a. contract would become void. b. contract would be voidable by the seller only. c. buyer must be allowed additional time to meet the condition. d. contract would be voidable by the buyer.

D

The amount of earnest money necessary for a given transaction is NOT determined by a. the buyer. b. the seller. c. the buyer and seller. d. the broker.

D

The legal grace period in an option to purchase real estate is how long? a. 72 hours b. 5 days c. 30 days d. There is no grace period

D

The phrase "as is" when used in real estate contracts means the buyer is accepting the property without a. a survey. b. a title report. c. new financing. d. warranty as to physical condition.

D

When property is purchased using a land sales contract, the instrument used to convey legal title would be a. an executory deed. b. a bargain and sale deed. c. a warranty deed. d. non-existent since legal title is not transferred until the contract is paid off.

D