Session 4 Mixed Mult. Choice

The seller of a property that has been listed for many months is out of town for an extended period of time, and a full price offer is made by a buyer. The listing broker: A. may accept the offer because the agent is the seller's attorney-in-fact B. may not accept the offer C. may accept the offer because it is a full price offer D. may accept the offer based on the broker's fiduciary duties

B. may not accept the offer

A mortgage contingency clause in an agreement of sale will include all of the following items EXCEPT the: A. amount of the mortgage B. name of the lending institution C. maximum interest rate D. commitment date

B. name of the lending institution

If the real buyer of a property wants to remain anonymous, what term should be used after the name of the buyer stated in teh purchase contract? A. or principal B. or nominee C. or assignor D. or nominor

B. or nominee

A hazard insurance premium is determined by the: A. lender B. property value C. escrow D. real estate broker

B. property value

A home goes into contract in March at a price of $275,000 and closing is scheduled for June. If the value of the home increases by $30,000 in May: A. the sales price will be renegotiated B. the parties are bound to proceed with the contract C. a new appraisal is necessary D. the buyer must pay half of the value increase to the seller

B. the parties are bound to proceed with the contract

A buyer and seller enter into a purchase and sale agreement. If the seller wants to rescind the contract and the buyer is willing to allow the rescission, what would have to occur? A. the seller can keep the earnests money B. the parties must be restored to their original positions before the contract C. a quiet title action must be completed D. the listing must have expired

B. the parties must be restored to their original positions before the contract

If the buyer in a purchase agreement were killed in an auto accident before closing: A. the purchase agreement is null and void B. the purchase agreement is binding on their estate C. the purchase agreement is voidable by their estate D. their insurance company is bound to their contract

B. the purchase agreement is binding on their estate

P mails an offer to J on March 4 to purchase J's property. The offer states that J has until no later than March 10 to notify P of acceptance. J accepts the offer immediately and mails it back to P, but due to postal strike, P does not receive the acceptance by March 10. At this point: A. J can appeal to the Real Estate Department B. there is no contract C. the broker can mediate D. there is a valid contract

B. there is no contract

In a contract for the sale of real estate, which of the following terms relates to the alternate dispute resolution? A. arbitration B. negotiation C. specific performance D. contingency

A. arbitration

A seller accepts a buyer's offer while the seller is out of town. What should the broker do with the earnest deposit? A. contact the seller and ask the seller where they would like the earnest money deposited B. Keep the earnest deposit in a safe in the office until the sellers return from vacation C. Immediately deposit the money into an escrow account D. Have the buyer hold the money until the seller is back from vacation

A. contact the seller and ask the seller where they would like the earnest money deposited

Between the time the purchase contract is signed by the buyer and seller and title changes hands, the contract is: A. executory B. executed C. voidable D. unenforceable

A. executory

An older home is put up for sale, and the owner doesn't tell the listing agent about the poor electrical wiring. When a prospective buyer comes to view the home and asks about the electrical wiring, the agent states that it is in "good working condition." The agent: A. has made a considerable misrepresentation B. has not done anything because they did not know about the problem C. cannot be held liable for any repairs because they were unaware of the problem D. has made a puffing statement

A. has made a considerable misrepresentation

What type of clause in a contract would protect the buyer's and/or seller's agent from being sued? A. indemnification clause B. contingency clause C. due diligence clause D. liquidated damages clause

A. indemnification clause

The amount agreed upon as the full damages in the event a contract is breached is known as: A. liquidated damages B. judgment damages C. punitive damages D. nominal damages

A. liquidated damages

Who has the primary responsibility for presenting an offer? A. listing broker B. selling broker C. salesperson D. buyer's broker

A. listing broker

In a contract to purchase, the parties agree to settle any dispute through arbitration. If they have a dispute, what may the parties do? A. rely on arbitration as the sole remedy B. sue in small claims court C. arbitrate the dispute and sue in small claims court if dissatisfied D. sue in superior court

A. rely on arbitration as the sole remedy

In connection with a purchase agreement, the decision of whether to accept an earnest money forfeiture, let the buyer withdraw, or sue for specific performance or damages is made by this: A. seller B. buyer C. broker D. escrow

A. seller

If a verbal offer is made on a property and 2 hours later a different written offer is made, the listing agent must: A. submit both offers B. present only written offer C. present whichever one is higher D. present only the verbal offer

A. submit both offers

T made an offer to buy a property which the seller accepted. The acceptance was communicated to T by phone, but T died before receiving the contract. In this situation: A. there is an enforceable contract B. T's heirs are bound to the agreement C. T's death violated the contract D. The heirs must void the contract within 30 days

C. T's death violated the contract

S makes an offer to purchase a home listed by a broker, but the seller is not available until Wednesday. On Tuesday S wishes to withdraw the offer. Which of the following statements is CORRECT? A. S cannot do this as S has signed the contract B. S must forfeit the earnest money C. The broker must return the deposit and offer D. The broker should tell S the offer has been accepted

C. The broker must return the deposit and offer

Failure to perform or fulfill a contract is termed a: A. defect B. fault C. breach D. delinquency

C. breach

The amount of the earnest money is determined by the: A. buyer B. seller C. buyer and seller D. broker

C. buyer and seller

When contracting to buy a new home from a builder, the agreement usually calls for the earnest money to be: A. deposited in escrow B. deposited in the broker's trust account C. deposited in the seller's business account D. deposited in escrow within 48 hours of acceptance

C. deposited in the seller's business account

A purchaser informs you that the seller has five days in which to accept this offer. The purchaser during this period: A. may not demand his earnest money be returned B. must wait the full five days before taking any action C. may withdraw the offer before acceptance D. may do nothing unless the time of the listing has expired

C. may withdraw the offer before acceptance

If, while showing a home, a real estate agent refers to the home as beautiful and exquisite and omits the fact that there was water damage, the agent could be held liable for: A. puffing B. puffing and misrepresentation C. misrepresentation D. neither puffing nor misrepresentation

C. misrepresentation

What can affect the premium on a property insurance policy? A. buyer's age B. health of the buyer C. number of claims on the property D. number of people in the family

C. number of claims on the property

In the event that a property is damaged by fire prior to the closing, the: A. buyer would have to buy the property B. risk of loss would be upon the buyer C. risk of loss would be upon the seller D. buyer must forfeit the earnest money

C. risk of loss would be upon the seller

Which of the following would NOT be indicated on a wood infestation report? A. visible evidence of termites B. dry rot in some of the wood C. termite infestation known to be at a neighbor's house D. cellulose debris

C. termite infestation known to be at a neighbor's house

It's been a seller's market, and your client keeps getting beaten to the punch on buying a home. So, your client requests they make offers on multiple properties. Which is correct? A. the salesperson can tell the buyer that if more than one offer is accepted, they can back out during the inspection period B. the salesperson can submit multiple offers but will need approval from their employing broker C. the offer must disclose to the sellers that the buyer is making multiple offers D. multiple offers may not be made

C. the offer must disclose to the sellers that the buyer is making multiple offers

When a purchase offer indicates that a nominee may be the person closing the purchase: A. the seller does not have the right to approve the nominee B. the buyer must disclose the nominee within 10 days of seller's acceptance C. the seller may require disclosure of the nominee to determine the nominee's ability to close on the purchase D. the named buyer will forfeit earnest money if financing is not available

C. the seller may require disclosure of the nominee to determine the nominee's ability to close on the purchase

Buyer J's purchase contract is contingent upon a home inspection, qualifying for financing, and a septic tank inspection. The lender wants a well inspection. If there are problems with any of these inspections, which contingency would NOT allow buyer J to back out? A. home inspection B. septic tank C. well D. financing

C. well

In Arizona, a purchase agreement prepared by a licensee must contain which of the following provisions? A. the manner in which the buyers are taking title B. the parties' signatures must be notarized C. prorations will always be done as of the date of closing D. the form of earnest money must be stated

D. the form of earnest money must be stated

A person name in an insurance policy who will receive the insurance proceeds if the property is damaged is the: A. loss payor B. loss payee C. additional party insured D. homeowner

B. loss payee

Earnest money is normally held: A. by the listing agent's broker B. by the buyer's agent's broker C. only in a broker's trust account D. by the seller

B. by the buyer's agent's broker

A provision in a contract to purchase which specifies that the sale depends on whether or not the buyer can obtain financing is a(n): A. right of first refusal B. contingency clause C. option D. hold harmless clause

B. contingency clause

An offer to purchase is a(n): A. unilateral contract B. expression of intent to enter a contract C. bilateral contract to purchase D. binding on the offeror

B. expression of intent to enter a contract

In a contract for the purchase of land, the closing date was July 30. The buyer and seller realize that they cannot close on that date because the buyer's loan is going to take a couple of days more. What documents do the buyer and seller need to sign to move the date of closing? A. amendment B. extension C. loan estimate D. estoppel

B. extension

A property that was previously used as a gas station is for sale and priced way below market value. If a buyer is interested in purchasing the property, the listing agent should: A. tell the buyer that gas stations are making a comeback in the area B. inform the buyer that there might be environmental cleanup costs on the property C. suggest that the buyer offer the full list price D. provide comps in the area to show what a great value the property is

B. inform the buyer that there might be environmental cleanup costs on the property

An agent lists a home during the summer months. The seller tells the agent that a new heating system was installed five years ago. What should the agent say to prospective buyers? A. "the heating system is fine" B. "the owner says the heating system is in order" C. "there shouldn't be any problems because the system is only five years old" D. "if you are concerned, you should have it inspected"

D. "if you are concerned, you should have it inspected"

A property is listed for $45,000. Broker M brings a buyer who offers $44,000. The seller then counters with $44,500 but the counteroffer is NOT accepted by the buyer. Later, the seller decides to accept the $44,000 offer. Which of the following statements is CORRECT? A. Broker M is entitled to a commission B. There is a contract in effect for $44,500 C. There is a contract in effect for $44,000 D. There is no contract in effect

D. There is no contract in effect

An escrow, once established, is subject to rescission by: A. the broker B. only the seller C. only the buyer D. an agreement between the buyer and the seller

D. an agreement between the buyer and the seller

After a purchase contract is accepted, the seller continues to put off the closing well beyond the agreed to date. In this situation, the: A. contract is null and void B. buyer has no recourse C. seller has no liability D. buyer may sue for specific performance

D. buyer may sue for specific performance

When a closing to purchase a property occurs at the same time that the seller is closing on the acquisition of the same property, it is known as a(n): A. double offer B. assignment of interest C. dual agency D. double escrow

D. double escrow

Real estate licensees should safeguard a client's or customer's personal information in order to prevent: A. double escrows B. wire fraud C. misrepresentation D. identity theft

D. identity theft

Which of the following expresses the parties' desire to negotiate a sale or lease but is usually a nonbinding agreement? A. option B. right of first refusal C. purchase contract D. letter of intent

D. letter of intent

Which of the following would NOT reveal insurance claims or losses related to a specific property or claimant? A. CLUE report B. Claims history C. loss history report D. loss payee

D. loss payee

When a buyer's interest in a purchase contract is assigned to a third party, the seller's permission: A. is always required B. is never required C. must be obtained at time of listing the property D. may be required

D. may be required

A seller accepts a purchase contract but makes a minor modification in the terms. The purchaser is: A. bound by the original offer B. bound to accept the changes C. bound by the agent's decision D. relieved of the original offer

D. relieved of the original offer