Contracts of Sale

The legal remedy to force the seller to close the sale is called

specific performance

When a contract of sale includes a due diligence contingency for the buyer's inspection,

the buyer may terminate the contract if the results of an inspection are negative

There is a clause in a contract of sale allowing an inspection for wood-destroying insects. Termites are discovered. Who pays to correct the problem? To be effective, a contract of sale must include

the person named in the contract as the responsible party

To be effective, a contract of sale must include

the purchase price and terms

A prospective purchaser has a legal right to demand which of the following?

the return of the earnest money deposit prior to seller's acceptance of the offer to purchase

A buyer defaulted on a contract of sale for which the buyer had paid a $5,000 earnest money deposit. As to the deposit,

the seller may keep it

Buyer and seller shake hands on a transaction for a house at $300,000. The contract is

unenforceable

Neil enters into an oral contract to purchase real estate and provides a $1,500 check as earnest money. The oral contract is

unenforceable

When buyer and seller have orally come to an agreement for the sale of real estate, there is

unenforceable agreement

A seller of real estate is also known as the

vendor

A contract that has no force or effect is said to be

void

Herb is 17 when he signs a contract to lease a small house. After the property manager accepts his offer, the lease contract is

voidable by Herb

A contract for the purchase of real estate entered into by a 17-year-old is

voidable by the 17-year-old

Which of the following is true regarding the assignment of a sales contract?

An assignment of the sales contract by the buyer is generally valid

Joe offers to buy Susie's house for $225,000. Susie examines Joe's offer and then offers to sell her house to Joe for $250,000. Which of the following is true?

An offer from Susie to Joe now exists.

Carol is buying a house and has 30 days in which to obtain a financing commitment as specified in the sales contract. The contract states that Carol must notify the seller within that period if she cannot arrange financing, or risk default if she does not close. The contract states that "time is of the essence" applies to financing approval. Which is true?

Carol term-32must adhere to the stated time frame, which will end at 11:59 PM on the 30th day

________ means that something is left to be done to a contract.

Executory

Joe made an offer to buy Susie's house. The offer says, "This offer will remain open until noon, October 22, 2016." It is now 3 PM October 21, 2016. Which of the following is true?

If Joe has changed his mind, he may now withdraw the offer.

Which of the following is true about a contract of sale?

It binds both parties to complete the sale when conditions are met

_______ is used to substitute a new borrower, with the lender's approval.

Novation

Which of the following is not true?

Once a contract of sale is signed, there is no way to avoid going through with the deal

Sally has shown Rebecca 11 homes, and Rebecca has selected one and made an offer. An hour later Rebeca changes her mind. Which is true?

Rebecca may withdraw before the seller accepts the offer

The law that requires contracts for the sale of real estate to be in writing to be enforceable is the

Statute of Frauds

A property condition inspection was permitted by a contingency clause to a contract of purchase and sale. The inspection report indicates that multiple repairs are needed, and the buyer doesn't want to purchase the property. Which of the following is true?

The buyer may get a refund of earnest money if repair costs exceed the limit stated in the contract.

Which of the following is true under a contract of sale in which the date of occupancy is later than the settlement date?

The contract should specify whether the seller is to pay the buyer.

The owner, Marvin, has given his friend, Kevin, power of attorney. Which of the following is correct?

The power of attorney must be in writing if it provides Kevin with authority to sell Marvin's house.

A homebuyer signs a contract with a seller that is contingent on specific financing. The buyer changes his mind and informs the seller that she will never buy. Which of the following is correct?

The seller may sue for breach of contract.

Which of the following would not be a contingency clause in a sale contract?

The settlement will be within 90 days.

A licensed salesperson presented to the owner an offer for $150,000. The owner counteroffered at $160,000. While the potential buyer is considering the counteroffer, the owner sends an e-mail rescinding the counteroffer. Which of the following is true?

There is no contract

A signed purchase and sale agreement is

a binding contract

A valid contract to purchase real estate must include

a legal description

A buyer's final inspection, usually performed before closing, is called

a walk-through

One who has a right to sign the name of a principal to a contract of sale is

an attorney-in-fact

In any real estate contract of sale there must be

an offer and acceptance

Harry gives Sam a $5,000 payment and a written agreement stating that, on July 1 of the following year, Harry will purchase the property from Sam for $150,000 cash, or Sam may keep the money. this transaction is

an option agreement

A person who has the power to sign the name of his principal to a contract of sale is a

attorney-in-fact

A valid real estate contract of sale must

be signed by the buyer and seller

When a real estate buyer purchases a seller's piano, what document is usually prepared

bill of sale

A valid contract of purchase or sale of real property must be signed by the

buyer and seller

Which parties determine the amount of earnest money in a real estate contract?

buyer and seller

Due diligence is which party's obligation to discover flaws in the property?

buyer's

Simon submits a contract of sale through the seller's broker. It gives the seller 48 hours to accept. After 24 hours, Simon changes his mind and decides to withdraw the ageement. Simon

can withdraw anytime before he is notified of its acceptance.

A party to a contract of sale normally does not have the right to

change the provisions in the contract if it is convenient to her, change the provisions in the contract if it will save her money or back out of the contract if she finds a better deal

In a contract of sale, the closing date should be

clearly stated

To be enforceable, a contract of sale must have

competent parties

Hand money paid upon the signing of an agreement of sale is called

earnest money

A contract of sale is signed by the buyer and seller. Before closing, the buyer has

equitable title

A contract form for the sale of real estate that is not yet signed is

executory

A fixture

is normally assumed to accompany a property that is sold

A contract of sale included a financing contingency. The purchaser could not obtain the loan required. The purchaser

is refunded all earnest money

If the buyer defaults, the earnest money is usually used as

liquidated damages

Brokers may submit

listing agreements, purchase and sale contracts, and options

In the owner's absence, a relative with the owner's written general power of attorney

may sell the property

The buyer makes an offer in writing. The seller accepts the offer but makes a small, unimportant change before returning it. There is

no contract

Two weeks after purchase, the buyer discovers oil on the property. The mineral rights are most likely

owned by the buyer unless reserved by the seller in the deed

If, upon receipt of an offer to purchase under certain terms, the seller makes a counteroffer, the prospective purchaser is

relieved of his original offer