Real Estate 414 - Real Estate Principles

Liquidated damages paid on default by the buyer of a single-family residence who intended to occupy the dwelling cannot exceed what percentage of the purchase price?

3%

The statute of limitations for an action based on a written real estate contract is

4 Years

Failure to perform a contract is

A Breach

When both parties agree to cancel a contract, they effect

A Rescission

Doris and Kathleen, who are neighbors, enter into an agreement to not permit their real estate agents to sell their homes to families with children. This agreement lacks ____________ so it's void.

A lawful objective

Martha makes an offer to buy Drake's home, and he accepts it. Under the terms of the agreement, Martha is supposed to put down an earnest money deposit of $10,000. However, she only puts down $5,000. Drake accepts the lesser deposit, and the sale ultimately is finalized. This is an example of ___________

Accepting partial performance

Mary persuaded her elderly aunt Agnes to buy a grossly overpriced condominium. Mary knew the price was too high, but she received a commission on the sale from the seller. Aunt Agnes may complain of

Actual fraud and undue influence

A well-drafted real estate purchase contract will include provision for

All of these: The buyer's possession of the property The financing terms Proration of property expenses

Todd made an offer for the Brown residence, and the Browns accepted the offer. On reconsidering, Todd decided to back out of the deal, and the Browns agreed to let him do so. Todd and the Browns then signed

An agreement rescinding the purchase contract

All of the following are true regarding implied agreements EXCEPT which one?

An implied agreement is based on a formal agreement.

If a buyer's performance of her sales contract becomes economically impractical, she should,

Ask that the contract be terminated

In contract law, partial performance occurs when a party ______________

Does some, but not all, of what the party has agreed to do

In a real estate transaction, which of the following is established when parties enter into a agreement voluntarily with full understanding of the contract terms?

Consent

Which of the following elements is always required for a real estate contract to be valid?

Consideration

This is a legal written agreement between a buyer and a seller that states the purchase price and other terms of understanding by which real property will be transferred.

Contract for sale

Which of these groups of people are considered legally able to enter into a contract in California?

Emancipated minors, aliens, LLCs

The contract Haji Ababe accepted states a purchase price "as appraised on May 12, 2016, by Mike Morton, MAI." Based on this provision, the contract is

Enforceable

Drew signed a contract to sell his farm to George. Drew has second thoughts and refused to sell, but the sale went through anyway. How did this happen?

George received a court order for specific performance of the contract.

The role for preprinted contracts is

Handwriting takes precedence over both typing and printing.

A 17-year-old can contract as an adult if she

Is Emancipated

The residents of Blair Avenue are a close-knit bunch. They are all young couples with small children, and they don't want this dynamic to change when two of the couples have to move. Those couples sign an agreement promising not to sell to anyone without kids or to anyone over the age of 50. The contract cannot be enforced because it's missing _________________

Legal Purpose

A seller received an offer of $610,000 for his house. His asking price is $635,000. The seller counted with $625,000. If the buyer rejects the counteroffer, may the seller accept the $610,000 offer?

No

Can a broker enforce an oral listing agreement to his neighbor's home?

No

Mary contracted to buy her mother's house when her mother moves to a senior living community, but now Mary must move because of work and no longer wants to buy the house. With their mother's agreement, Mary's sister, Tina, steps in, relaxing Mary from her obligation. They write up a new contract, with the only change being that Tina is now the party to the contract rather than Mary. This is an example of ____________

Novation

What is the key difference between assignment and novation of a contract?

Novation releases the original party from all obligations, while assignment does not.

Mary has a contract to buy her mother's house when her mother is finally ready to move to a senior living community. This way, the house stays in the family. After her mother finds a suitable senior apartment and moves, Mary writes a check for the agreed-upon amount, and her mother transfers the deed to Mary. What is happening in this scenario?

Performance

Drew and Hank were camping at Hank's riverfront cabin. Bank told Drew that he rarely used the cabin and was thinking of selling it. Drew said that he'd buy it from Hank for $80,000, which Hank agreed was a fair price. It is two months later, and Hank is upset that Drew now says he won't buy it. Why isn't this contract enforceable?

Real estate contracts must be writing.

The time period in which a lawsuit can be brought is set by

The Statute of Limitations

California's Uniform Vendor and Purchaser Risk Act clarifies the rights granted to whom?

The buyer and the seller

Henry wants to submit an offer for Lacy's house. Under the statute of frauds, which of the following is NOT a requirement must meet for his offer to become an enforceable purchase agreement?

The contract must be notarized

Two intoxicated co-workers sign a contract in which they agree to marry each other if they're both still single when they reach age 40. Which of the following is true about this contract?

This is a voidable contract because the parties were intoxicated at the time they signed it.

You receive an offer in the mail that says you're eligible to win a cash prize if you place some stickers on a form and return it to the sender. What type of contract is this?

Unilateral Contract

Which is NOT a way to terminate a contract?

Verification

What is the deciding factor when determining whether the buyer or the seller takes the loss on a property that is taken by eminent domain?

Whether or not title and possession have transferred

Lonnie and Karen have a contract to buy the Santos house. Following a four-day rainstorm, the Santos house was pushed off its foundation by a mudslide and is now resting about halfway over a ravine. The contract probably is

Discharged because performance is impossible.