Real Estate - L6 Pop-Up Questions
Which of the following people might bring a suit for specific performance? Select your answer below: A.A buyer in a real estate transaction in which the seller backed out one day before closing B.A homeowner unhappy about a neighbor who painted her house purple in violation of the subdivision CC&Rs C.A real estate broker who didn't receive the commission she was promised D.A seller who was overcharged during escrow
A.A buyer in a real estate transaction in which the seller backed out one day before closing
Which of the following does NOT terminate an offer? Select your answer below: A.An offer from a third party for a higher purchase price B.A qualified acceptance (counteroffer) by the offeree C.The offeror dies before the offeree accepts the offer D.The offeror revokes the offer before it is accepted
A.An offer from a third party for a higher purchase price
The listing agreement states that a property is 5.1 acres. The purchase and sale agreement states that it's 5.12 acres. The mortgage notes that the property is 5.22 acres, while the deed states that the lot's size is 5.21 acres. If there is a dispute, which of the documents will take precedence? Select your answer below: A.Deed B.Listing agreement C.Mortgage D.Purchase and sale agreement
A.Deed
When can a minor enter into a binding contract? Select your answer below: A.If a guardian co-signs B.If the contract is witnessed C.If the minor is at least 16 years of age D.Never
A.If a guardian co-signs
Which of the following would NOT make a contract voidable? Select your answer below: A.It is missing an essential element B.One party signed the contract as a result of fraud C.The contract resulted from misrepresentation D.One of the parties was subject to duress
A.It is missing an essential element
When is an enforceable purchase and sale agreement formed? Select your answer below: A.When the buyer knows of the seller's written acceptance of the offer B.When the seller has orally informed the buyer of her acceptance C.When the seller has received the earnest money D.When the transaction has closed
A.When the buyer knows of the seller's written acceptance of the offer
Margo agreed to buy Peter's house. At closing, Peter changed his mind. He hasn't signed the deed and no longer wants to sell his house. Can Margo take legal action to force the sale? Select your answer below: A.Yes, Margo can file a suit for specific performance B.Yes, Margo can file a suit for possession C.No, Peter hasn't signed the deed so Margo has no legal rights D.No, Peter hasn't signed the deed so Margo cannot enforce the contract
A.Yes, Margo can file a suit for specific performance
A and B sign a rental agreement in which A agrees to lease her property to B in exchange for rent. This contract is: Select your answer below: A.bilateral B.implied C.unilateral D.voidable
A.bilateral
In an executed contract: Select your answer below: A.both parties have performed their duties B.only one party has made a promise C.at least one promise has been completed D.one party may sue for specific performance
A.both parties have performed their duties
The optionee in an option to purchase real estate: Select your answer below: A.has no obligation to purchase the property B.is the prospective seller of the property C.must purchase the property, but may do so at any time within the option period D.is limited to a refund of the option consideration as a matter of right if the option is exercised
A.has no obligation to purchase the property
A provision in a sales contract that states that a sum agreed to in advance will serve as full compensation in the event of a breach is a: Select your answer below: A.liquidated damages provision B.compensatory damages provision C.punitive damages provision D.default damages provision
A.liquidated damages provision
A contract for the purchase and sale of real property does not contain an adequate land description. The agreement is: Select your answer below: A.unenforceable B.valid C.void D.voidable
A.unenforceable
Which of the following is true regarding an oral agreement for the sale of real property? It is: Select your answer below: A.unenforceable; it violates the statute of frauds B.void; it violates the statute of frauds C.voidable; it violates the statute of frauds D.valid; assuming both parties are above the age of majority
A.unenforceable; it violates the statute of frauds
An offer is dated June 4. The offer is accepted on June 7. The buyers are approved for a loan and satisfy the financing contingency on June 9. The transaction closes on June 28. The date of the contract is: Select your answer below: A.June 4 B.June 7 C.June 9 D.June 28
B.June 7
Barker is declared incompetent by a court, and his daughter Marge is appointed to handle his affairs. After several years, Marge asks her sister Beth to take over her duties. Beth then lists Barker's property for sale. Would a sale of Barker's property be valid under these circumstances? Select your answer below: A.No, any contract concerning real estate and an incompetent person is automatically void B.No, Beth hasn't been designated by a court to handle Barker's affairs C.Yes, but only if Beth gets Barker's written permission D.Yes, Marge has delegated her responsibilities properly
B.No, Beth hasn't been designated by a court to handle Barker's affairs
Joe and Clarissa enter into a purchase and sale agreement. While they were negotiating the price, Joe claimed that a basement could be built despite the property's rocky soil. He was wrong. This contract is: Select your answer below: A.voidable by Joe because he was wrong about the soil B.voidable by Clarissa because Joe misrepresented the soil's condition C.voidable by neither D.void
B.voidable by Clarissa because Joe misrepresented the soil's condition
W, age 17, enters into an installment contract to purchase a five-year-old car from S, an adult. From a legal point of view, the contract is: Select your answer below: A.void B.voidable by W only C.voidable by S only D.voidable by either S or W
B.voidable by W only
A buyer has signed a purchase and sale agreement for an estimated 48 acres of land. When the property is surveyed, it turns out to be only 37 acres. A contract that results from a misrepresentation like this is: Select your answer below: A.voidable by either party B.voidable by the aggrieved (injured) party C.a valid contract D.void
B.voidable by the aggrieved (injured) party
A buyer and seller agree upon an option to purchase, with a 60-day option period. When should the parties agree upon the purchase price? Select your answer below: A.Any point between the signing of the option agreement and closing B.At closing C.Before signing the option agreement D.When the buyer decides to exercise the option
C.Before signing the option agreement
Mark tells Elizabeth that a new freeway will be built near the vacant land he is selling, even though he knows the freeway is now being built along a different route. Elizabeth relies on Mark's representation and signs a purchase and sale agreement, agreeing to pay a premium price for the land. Shortly before closing, Elizabeth finds out about the freeway plans. Which of the following is true? Select your answer below: A.Elizabeth must complete her part of the contract; she can't claim fraud B.The contract is voidable by Mark C.Elizabeth can force Mark to fulfill his part of the contract, even though there was fraud D.the contract is void; there was an intentional misrepresentation
C.Elizabeth can force Mark to fulfill his part of the contract, even though there was fraud
A contract to purchase property must include which essential element? Select your answer below: A.Equal bargaining power between the parties B.A seal by a notary public C.Mutual agreement D.A three-day right to rescind
C.Mutual agreement
A potential buyer gives a seller an offer that doesn't meet the seller's demands in the listing. What has the buyer given? Select your answer below: A.Contract of sale B.Counteroffer C.Offer to purchase D.Option
C.Offer to purchase
You might hear the terms "offer and acceptance," "mutual assent," and "meeting of the minds" in connection with a contract. What do they all have in common? Select your answer below: A.They affect only contracts for the transfer of personal property B.They mean there is a qualified acceptance of an offer C.They mean there is an unqualified acceptance of an offer D.They refer to whether the parties have capacity to enter into a contract
C.They mean there is an unqualified acceptance of an offer
The Taylors sign an exclusive right to sell listing that expires in six months. A short time later they change their minds and decide not to sell. Can they terminate the listing? Select your answer below: A.No, they must wait for the listing to expire in six months B.No, an exclusive right to sell listing is binding on both parties C.Yes, if the parties mutually consent D.Yes, either side may freely rescind a listing agreement without penalty
C.Yes, if the parties mutually consent
A buyer and seller have signed a contract, but the sale is not completed and the deed hasn't been delivered. Until the title is transferred to the buyer at closing, the contract is: Select your answer below: A.void B.unenforceable C.executory D.executed
C.executory
Frank gives Stella an option to buy his house. Stella, as the optionee, is obligated to: Select your answer below: A.exercise the option at the end of the option period B.apply for a zoning change, if one is necessary in order to use the property in the way Stella wants C.pay consideration for the option right D.record the option
C.pay consideration for the option right
An option: Select your answer below: A.transfers title immediately when it is signed by both parties B.transfers legal title (but not equitable title) when it is signed by both parties C.sets a time limit to keep an offer open D.does not include the basic terms of the contract (such as the sale price); those are to be determined later
C.sets a time limit to keep an offer open
In a bilateral contract: Select your answer below: A.a duty will be performed by one party only B.one party can restrict the performance of another party C.two parties have exchanged promises, and both parties are obligated to perform D.all parties have fully performed their duties
C.two parties have exchanged promises, and both parties are obligated to perform
A buyer failed to sign her offer to purchase a property. Her offer is: Select your answer below: A.valid B.voidable C.void D.enforceable
C.void
A contract signed by a person who was intoxicated at the time of the signature would be: Select your answer below: A.valid B.void C.voidable by the intoxicated party D.voidable by the other non-intoxicated party
C.voidable by the intoxicated party
A 17-year-old purchased a house. He moved in, lived in it for a year, and then decided he didn't want the responsibility of owning a home. He refused to honor the contract. In this case the contract: Select your answer below: A.is valid; the buyer must abide by its terms B.is voidable; the buyer can choose whether or not to carry out its terms C.was voidable when signed; however, the buyer probably ratified it by living in the house D.is void; it was missing an essential contract element
C.was voidable when signed; however, the buyer probably ratified it by living in the house
In an option: Select your answer below: A.no consideration is required B.the seller is the optionee and the buyer is the optionor C.the seller must apply the option money to the purchase price if the optionee exercises her option D.the option agreement must clearly state all the terms and conditions of the sale
D.the option agreement must clearly state all the terms and conditions of the sale
A letter of intent: Select your answer below: A.contains all terms and conditions of a contractual agreement B.is generally binding C.is used regularly in small residential transactions D.sets out basics prior to negotiation
D.sets out basics prior to negotiation
Jim is a local handyman. Yolanda, a homeowner, hires him to build a chicken coop in her back yard. They agree on a set price for the job. However, once Jim begins working, he realizes it's going to take him a lot longer than he thought, and he realizes he's being underpaid. Jim: Select your answer below: A.will be liable for breach of contract if he doesn't finish the chicken coop, regardless of whether it takes longer than he expected B.can sue Yolanda for violation of the Fair Labor Standards Act C.can make Yolanda renegotiate the terms of the contract, simply by refusing to proceed unless she does so D.made an honest mistake, so Yolanda is legally obligated to pay him more for the work
A.will be liable for breach of contract if he doesn't finish the chicken coop, regardless of whether it takes longer than he expected
A buyer and seller sign a contract for deed. Two weeks later, the buyer is declared mentally incompetent. The buyer's guardian contacts the seller and says that he can continue to make the buyer's payments as agreed. Which of the following is true? Select your answer below: A.The buyer can disaffirm the contract within a reasonable period of time B.The buyer can finish out the contract as the buyer's guardian has proposed C.The seller can agree to receive payments from the guardian and if the payments become unreliable, the seller can then cancel the contract D.The contract is automatically voided because of the buyer's incapacity, regardless of what the guardian wants
B.The buyer can finish out the contract as the buyer's guardian has proposed
A minor leases an apartment right before he turns 18. Immediately after he reaches the age of majority, he contacts the landlord and says he's terminating the lease. Which is true? Select your answer below: A.This is possible only if the landlord already knew the tenant was a minor, and not if the tenant initially misled the landlord about his age B.This is possible, because he notified the landlord within a reasonable amount of time after having reached the age of majority C.This isn't possible, because tenants are subject to caveat emptor D.This isn't possible, because the tenant can't void the lease after having taken possession
B.This is possible, because he notified the landlord within a reasonable amount of time after having reached the age of majority
In order to create a valid contract, the offeree must: Select your answer below: A.accept the offer within five days B.accept the offer without making any changes to it C.immediately accept the offer (the offeree has no more than 12 hours to consider acceptance) D.not accept the offer without consulting with his own agent (or other representative)
B.accept the offer without making any changes to it
John negotiated an option contract with Margaret, in which Margaret had three months to purchase John's property. In the second month, Margaret found another buyer. Margaret can probably transfer her right to purchase the property to another buyer because of the right of: Select your answer below: A.novation B.assignment C.first refusal D.rescission
B.assignment
Sally made an offer and gave the seller three days to accept. The next day, she found another property she liked better. Sally called the agent and revoked her offer. Sally must: Select your answer below: A.make sure the seller has been notified of the revocation before making an offer on the second property B.do nothing; she notified the agent of her decision to rescind the offer C.give the seller three days to accept or reject, as stated in her original offer D.None of the above
B.do nothing; she notified the agent of her decision to rescind the offer
Marci, a home owner, hired Charles to do ongoing general maintenance on her property. They entered into a one-year contract. Six months later, Charles got married and his wife wanted to move to another state. Charles knew someone else--Marian--who provided excellent home maintenance services. Everyone agreed that Marian would take over for Charles. Marci and Marian entered into a new contract, and Marci's contract with Charles was canceled. This arrangement is a/an: Select your answer below: A.assignment B.novation C.breach D.tender of performance
B.novation
William took a listing and soon discovered that his client had been declared incompetent by a judge six months ago. Under these circumstances, the listing contract is: Select your answer below: A.enforceable if William finds a buyer B.of no value to William because it's void C.renegotiable, but only for 24 hours D.binding, as William was acting in good faith
B.of no value to William because it's void
The term "meeting of the minds" is associated with: Select your answer below: A.full performance of a contract B.offer and acceptance C.execution D.tender of an offer
B.offer and acceptance
An optionee's rights can be assigned under all of the following circumstances, EXCEPT when the: Select your answer below: A.option money is $10 or less B.option money is in the form of a promissory note C.optionor has died D.optionee has died
B.option money is in the form of a promissory note
When the parties to a contract put themselves back into the same positions they were in before they entered into the contract, the contract has been: Select your answer below: A.canceled B.rescinded C.revoked D.performed
B.rescinded
A legal action brought in court to compel a party to fulfill the terms of a contract because the land is unique and money damages would not adequately compensate the party victimized by a breach is called a/an: Select your answer below: A.partition action B.suit for specific performance C.quiet title action D.injunction
B.suit for specific performance
The purchaser signs an offer and gives it to the real estate agent to pass on to the seller, along with an earnest money deposit. At this point: Select your answer below: A.the earnest money will be held by the agent until the buyer defaults after closing B.the offer can be withdrawn any time before it is accepted C.in the eyes of the law, the parties have formed a valid contract D.specific performance would be the remedy if the seller refused the offer
B.the offer can be withdrawn any time before it is accepted
Juanita offers $5 to whoever will rake the leaves in her yard. This is a/an: Select your answer below: A.license B.unilateral contract C.implied contract D.bilateral contract
B.unilateral contract
X and Y execute a properly drawn up option agreement for X to purchase Y's commercial property. X gives $5 in consideration. The option is: Select your answer below: A.unenforceable B.valid C.void D.voidable
B.valid
Chris, a real estate agent, met with Zach, a property owner, to discuss listing the property. Zach told Chris that he was illiterate and that he needed Chris to read the listing agreement to him. Chris did so, plus he spent a long time explaining the various terms and answering Zach's questions. Zach agreed to everything, and signed the agreement with an "X." The listing agreement is: Select your answer below: A.valid, as long as Zach gets his attorney to verify what Chris told him B.valid, because Zach was illiterate, not mentally incompetent C.invalid, because an illiterate person is not mentally competent D.invalid, because Chris was guilty of the unauthorized practice of law when he discussed the terms of the listing agreement with Zach
B.valid, because Zach was illiterate, not mentally incompetent
There are written contingencies in a purchase and sale agreement. This contract is potentially: Select your answer below: A.unilateral B.voidable C.executed D.contrary to public policy
B.voidable
Anna and June enter into a contract where Anna agrees to sell her house to June. Anna later changes her mind and refuses to sell. June then sues Anna to force her to go through with the contract. This is known as a suit for: Select your answer below: A.injunction B.damages C.lis pendens D.specific performance
D.specific performance
Agent Bob receives a deposit with a written offer that includes a five-day acceptance clause. On the second day, Buyer Martha notifies Agent Bob that she is withdrawing her offer and wants her deposit returned. Seller Lou hasn't accepted the offer yet. In this situation: Select your answer below: A.Bob notifies Lou that Martha is withdrawing her offer, and Bob and Lou each keep half of the deposit B.Bob keeps the entire deposit as his commission C.Martha can't withdraw her offer; it must remain open for the full five days D.Martha has the right to revoke her offer and get her money back at any time before Lou accepts the offer
D.Martha has the right to revoke her offer and get her money back at any time before Lou accepts the offer
Mark is selling his property, which has an unfinished basement. He gets a full-price offer from Susan, but the offer requires Mark to finish the basement prior to closing. Do Mark and Susan have a binding contract? Select your answer below: A.Yes, because both parties have made offers to each other B.Yes, because Susan made a full-price offer C.No, because a valid offer must be written and recorded D.No, because Mark has not accepted Susan's offer
D.No, because Mark has not accepted Susan's offer
After a purchase agreement has been signed, but before the transaction closes, the buyer attempts to have the contract voided. It is likely he will be able to prove that, because of bipolar disorder, he was mentally incompetent at the time the contract was signed (although he later went on medication). Is the contract still valid? Select your answer below: A.Yes, because mental illness does not factor into questions of contractual capacity B.Yes, because the deed has already been placed into escrow C.No, because buyers are entitled to rescind contracts before closing D.No, because his temporary incapacity allows him to rescind the contract
D.No, because his temporary incapacity allows him to rescind the contract
Two parties enter into an option agreement, scheduled to end in December. However, in October the optionee decides he doesn't want to buy the property. What should the parties do in order to terminate the option? Select your answer below: A.Complete a formal statement of novation B.Exercise the option's contingency clause C.File an interpleader action so a court can void the contract D.Nothing; the option will expire automatically
D.Nothing; the option will expire automatically
Of the following types of contracts, which one is a unilateral contract? Select your answer below: A.Escrow instructions B.Exclusive right-to-sell listing C.Lease D.Option
D.Option
To be enforceable, a contract for the sale of real estate must be in writing and signed by the parties. This is true because of which law? Select your answer below: A.Real Estate License Law B.Uniform Commercial Code C.Real Estate Settlement Procedures Act D.Statute of Frauds
D.Statute of Frauds
An executor listed her aunt's property. While showing the property to the agent, the executor said that her aunt always had tenants in the upstairs apartment. Without checking with zoning, the agent listed and sold the property as multifamily. If the property is not zoned multifamily, does the buyer have the right to rescind the contract? Select your answer below: A.No, because the executor should have checked to determine the zoning of the property B.No, because the title company should have checked to determine the zoning of the property C.Yes, because the agent misrepresented the property and any contract entered into under misrepresentation is void D.Yes, because the agent misrepresented the property and any contract entered into under misrepresentation is voidable
D.Yes, because the agent misrepresented the property and any contract entered into under misrepresentation is voidable
Mutual consent (offer and acceptance) is one of the requirements of a valid contract. All of the following are true regarding offer and acceptance, except: Select your answer below: A.a counteroffer changes the legal position of the offeror to offeree, and the offeree becomes the offeror B.an offer can be revoked before it is accepted C.the offeree can accept an offer, reject an offer, or make a counteroffer D.an offer to purchase real estate will become a binding contract when it's accepted orally
D.an offer to purchase real estate will become a binding contract when it's accepted orally
A real estate contract, in order to be valid, must include: Select your answer below: A.a contingency B.a "time is of the essence" clause C.an option D.consideration
D.consideration
An option to buy property has been exercised. At that point, it becomes a/an: Select your answer below: A.bifurcated contract B.unilateral contract C.executed biennial contract D.executory bilateral contract
D.executory bilateral contract
Victoria receives an offer from Lloyd for her property. The offer is for $225,000, and she receives it on Friday morning. On Saturday, she counters by changing the purchase price to $235,000. The counteroffer states that Lloyd has 48 hours to accept the offer. On Sunday, Lloyd rejects the counteroffer. Victoria immediately accepts Lloyd's original offer. Under these circumstances, the agreement is: Select your answer below: A.valid, because Victoria accepted all the terms of Lloyd's original offer B.valid, because Victoria accepted a written, valid offer C.not valid, because Victoria did not accept the offer within a reasonable period of time D.not valid, because Victoria terminated Lloyd's original offer when she made the counteroffer
D.not valid, because Victoria terminated Lloyd's original offer when she made the counteroffer
A homeowner with a mortgage sells his home to a purchaser who agrees to assume the mortgage. The purchaser applies for and obtains the lender's approval, and the seller is released from liability for the mortgage. This is an example of: Select your answer below: A.assignment B.subrogation C.subordination D.novation
D.novation
A contract gives a person the right to purchase property for a particular price within a certain timeframe. This contract is a/an: Select your answer below: A.land contract B.lien agreement C.sale-leaseback D.option
D.option
Martha gave Hannah the right to purchase her vacant lot for $65,000. Hannah paid Martha $1,200 for this right. Hannah is the: Select your answer below: A.mortgagor B.mortgagee C.optionor D.optionee
D.optionee
If a party has an option to buy a piece of property, that person: Select your answer below: A.is obligated to purchase the property at the end of the option period B.must pay off all of the seller's existing liens on the property C.can take out a loan on the property, in the seller's name D.paid consideration for the option
D.paid consideration for the option
A property is listed for $275,000. The buyers offer $265,000, and insist that the gourmet six-burner stove remain with the property. When the signed offer is presented to the sellers, the sellers accept the price, but want to take the stove with them. They cross out the item about the stove, sign the form, and return it to the buyers. Under these circumstances: Select your answer below: A.there is now a valid contract that has been signed by all parties B.the offer has been invalidated and the buyers will need to begin looking for a new property C.the sellers can turn around and accept the original offer, if the buyers won't go along with giving up the stove D.the original offer is terminated, and the sellers have made a counteroffer
D.the original offer is terminated, and the sellers have made a counteroffer
Jerry offered to buy some vacant land for $500,000. There were no contingencies in his offer, and it was accepted by the seller. Jerry was planning on building a shopping center on the property, but didn't mention this to the seller or his real estate agent. A few days before closing, Jerry learned that his financing for the shopping center had fallen through. The contract is: Select your answer below: A.void B.voidable C.unenforceable D.valid
D.valid
Loren has been looking for a home for several months. He finally found one he liked, just by driving around and looking at "For Sale by Owner" signs. He immediately made a full-price offer of $325,000. He made an earnest money deposit of $3,000. The seller quickly accepted the offer. The purchase and sale agreement is: Select your answer below: A.invalid, because Loren didn't use a real estate agent to close the deal B.invalid, because the home wasn't part of the local multiple listing service inventory C.valid, because Loren made an earnest money deposit as part of his offer D.valid, because Loren's consideration for the contract was the $325,000 purchase price
D.valid, because Loren's consideration for the contract was the $325,000 purchase price
The parties negotiate the sale of a property by writing letters to each other (in the old-fashioned way, by hand). Their agreement is: Select your answer below: A.invalid; the parties must meet with each other in person B.invalid; the parties must use a preprinted form C.invalid; each letter is only a counteroffer to the previous letter D.valid; under the statute of frauds, contracts to sell real estate are enforceable if they are in writing
D.valid; under the statute of frauds, contracts to sell real estate are enforceable if they are in writing
