3.

A sales contract is an example of a/an:

bilateral contract. (In a bilateral contract, both parties promise to perform as stated in the contract. An example is a real estate sales contract. The seller promises to sell a parcel of real estate and the buyer promises to pay a certain sum of money for it. A bilateral contract must be signed by both parties to be legally binding.)

In the Common Law states a contract must be accompanied by:

consideration. (In the Common Law states a contract is not valid unless each party has pledged to exchange something of value with the other party. The consideration exchanged may be tangible or intangible and may include granting the legal right to do something, or making a promise not to do something.)

A type of fraud that is committed with no intent to harm, mislead or misrepresent is:

constructive fraud

The broker who finds the buyer is known as the:

cooperating broker.

If any change is made by the person receiving an offer (offeree), this constitutes a rejection of the original offer and is known as a/an:

counteroffer

How would the buyer's deposit be listed on the closing statement?

credit to buyer, nothing to seller (The closing statement lists all amounts to be debited or credited to the buyer and seller. The buyer's deposit would be a credit to the buyer. It would not be listed on the seller's side.)

A listing which is illegal in some states, and allows the broker to keep all proceeds of the sale in excess of a net amount is called

net listing.

What should the buyer's agent do with earnest money or deposit given with a purchase agreement?

Give it to the listing broker in a timely fashion

In the Common Law states an offer to purchase may be revoked when?

At any time prior to acceptance by the seller.

Which of the following statements is true of an option?

It is not mutually binding.

"Offer and acceptance" is also known

Meeting of the minds. (Offer and acceptance occurs when the buyer and seller agree to the terms of a transaction.)

A buyer purchases a property "as is". The seller and the broker both knew that the house had bad wiring but did not tell the buyer. Which of the following statements is true?

Selling "as is" does not relieve the seller or the agent of the duty to disclose material defects.

A salesperson has a friend whose parents have just passed away, and he and his siblings want to sell their parents' house. The siblings have all verbally agreed to designate the friend to handle the sale of the property. Which of the following is true?

The purchase agreement is not binding because all of the heirs did not sign.

The seller received an offer on his home and sent a counter offer to the buyer. While the buyer was considering the counter offer, the seller received a higher offer with better terms. The seller's agent advise him to:

Withdraw the counter offer before it is accepted and then accept the second offer. (The seller must withdraw the counter offer before it is accepted in order to accept the second offer. If not, he might find himself having agreed to sell to two different parties.)

On the closing statement an assumption of the seller's loan would be listed as:

debit to seller, credit to buyer (It is easiest to think of the closing statements as the checking accounts for the buyer and seller. A deposit is listed as a credit and a cost or expense or withdrawal is listed as a debit. In this case the buyer deposits the new loan proceeds into his checking account as a credit and they are debited from the seller's account.)

A broker in listing a house, wanted an exclusive right to sell the property for 90 days. The seller wanted to retain the right to sell the property himself. What type of listing would be best?

exclusive agency

In what type of listing does the seller hire one broker but retains the right to sell the property himself without paying a commission to the broker?

exclusive agency listing

Which type of listing is the best one to ensure the broker a commission?

exclusive right to sell listing

A contract in which all the parties have met all the terms and conditions of the contract, and the contract is completed is:

executed. (An executed contract is a contract that is fully signed or performed. A contract not yet fully performed is executory.)

A contract which has been signed but all the terms of the contract have not yet been met is said to be a/an

executory contract. (No, A contract which has been signed and the terms have been met is said to be "executed". One in which the terms have not been fulfilled is "executory".)

The substitution of one party to the contract for another party, or the replacement of a new obligation for an old one is called

novation.

In which type of listing contract does the seller retain the right to employ as many brokers as he wants to try to sell his property, but is only obligated to pay a commission to the one who actually finds a buyer?

open listing (In an open listing the seller retains the right to employ as many brokers as he wants to try to sell his property, but is only obligated to pay a commission to the one who actually finds a ready, willing and able buyer. If the seller sells his property himself, he is not obligated to pay a commission.)

An example of a unilateral contract would be a/an:

option (In a unilateral contract, one party makes a promise with the hope that it will motivate another party to do something. The second party is not legally obligated to comply, but if he does, the first party is obligated to keep the promise. An example of a unilateral contract is an "option". An option is a right extended to purchase real property for a specified amount within a specified period of time. If the second party accepts the option to purchase, the party offering the option is obligated to sell to him. A unilateral contract must be signed by only one party.)

A purchase money mortgage is used in

owner financing.

A buyer becomes obligated when

the agent presents him with the accepted contract