Unit 10

A man signs a contract under which he may purchase a house for $800,000 any time within the next three months. The man pays the current owner $5,000 at the time the contract is signed. Which of the following best describes this contract?

Option to purchase

Sally and her buyer have negotiated back and forth with a seller and the listing broker for the last week. A number of offers and counteroffers have been made. To make sure everyone has an accurate final copy, Sally has completed a new Offer to Purchase and Contract (NCAR/NCBA). Does Sally need to be concerned with other versions of what was offered once the new agreement is signed?

Yes, Sally should keep the offer versions and the final contract for three years.

A broker is preparing an offer for a buyer he represents as an exclusive agent. The buyer wants to make certain there is a clear acceptance deadline for the offer. To accomplish this, the broker should

use a preprinted form that defines the time frame for acceptance.

During the due diligence period in the NCBA/NCAR 2-T Offer to Purchase and Contract, the buyer did not receive final loan approval but chose not to terminate the contract based on favorable communications from the lender. A week before closing, the buyer's loan application is denied. If the buyer terminates the contract at this point, the buyer

will forfeit the earnest money deposit, because it would be a buyer breach.

A buyer is under contract to purchase a seller's home for a sales price of $95,000. It becomes apparent that the seller cannot deliver clear marketable title and the buyer wishes to terminate the contract. According to the Offer to Purchase and Contract (NCAR/NCBA), the $2,000 earnest money deposit that is being held in the listing firm's trust account will be

returned to the buyer in full

A prospective buyer makes a written purchase offer through a buyer's agent at ABC Realty. The seller accepts the offer as written. The seller communicates to a listing agent at XYZ Realty that the offer was signed. At this point in time,

the buyer can still withdraw the offer.

The offer

Anyone who makes an offer to purchase property is known as the offeror—the person making the offer. Anyone who receives an offer is known as the offeree.

A for-sale-by-owner signs a written offer to purchase without making any changes to the offer. The seller then mails the signed offer to the buyer by express mail without any further contact with the buyer. Before receipt of the envelope from the seller, the buyer changes her mind about purchasing the property and calls the seller to withdraw the offer. Which of the following statements is TRUE?

Buyer cannot withdraw offer because she is already under contract.

Under contract terms, one party will pay the property owner $1,500 a month for 10 years. The property owner will continue to hold legal title to the property. That party will live on the property and pay all real estate taxes, insurance premiums, and regular upkeep costs. What kind of contract is in place?

Installment land contract

At 1:30 pm, a broker faxed an offer to purchase to her seller client. At 2:00 pm, after considering the offer, the seller called and informed his agent that he wanted to increase the earnest money deposit by $1,000. To make the seller's requested change for additional earnest money, the seller's agent need only 1. change the term in the original offer, initial, and date the one change on behalf of the seller.2. prepare a new offer and, with the seller's permission, sign on behalf of the seller.

NEITHER

A broker who represents a seller under an exclusive listing receives two offers for the property at the same time, one from a buyer-client of the firm and one from a buyer-customer. How should the broker handle the offers?

Submit both offers to the seller at the same time.

An offer to purchase is submitted on a listing while the property owner is out of town on business. The offer is electronically submitted to the owner and the owner signs and returns the offer with no changes in terms. If the signed offer is then electronically submitted to the listing agent who calls the buyer's agent with this information, which of the following statements is TRUE?

The seller is under contract to sell his property since electronic signatures are binding

The buyer's offer is made on the condition that the buyer's inspection indicates that all working systems of the structure are up to current code. This condition is called

a contingency.

The amount of earnest money deposit is determined by

an agreement between the parties to the contract.

According to North Carolina Real Estate Commission rules, a valid sales contract can contain all the following EXCEPT

brokerage compensation split.

In real estate, an option to purchase contract and the option fee are used to

compensate the seller for holding the property for the buyer while the buyer has the choice to terminate or proceed with the sale within the option period.

The buyer in an installment land contract is typically NOT responsible for paying during the contract period for

contract recording fees.

Under an installment land contract, the title to the property is held by

the vendor

All of the following are essential elements to create the validity of a purchase agreement EXCEPT

earnest money.

Shopping offers

is prohibited in North Carolina. is a practice in which a homeseller's real estate agent discloses prices and terms of an offer to competing buyers, in an effort to get higher bids.

The effective date of a sales contract is defined as the date that

notification of acceptance is given to the other party.

The listing broker has received four offers on a property. The first is full list price, the second is $5,000 over list price, the third is $2,000 under list price, and the fourth is full list price but has a contingency for the buyer to sell her current home. When presenting the offers, the listing broker should

present all offers to the seller at the same time and allow the seller to determine which, if any, to negotiate or accept.