Real Estate Contracts. quiz
A seller accepted money from a buyer for his unrestricted right to cancel the purchase transaction (option to terminate) within 10 days of the executed date of the sales contract. This agreement is a(n)
unilateral contract.
A contract that has no legal force or effect is
void.
The listing broker and the seller know that the foundation of the seller's house is unsafe. If they do not inform the buyer of this condition, the contract to purchase the property would be
voidable by the buyer.
All of the following are essential elements of a contract EXCEPT
words of conveyance
A transfer of rights or duties under a contract is a(n)
) assignment.
Whose signature is necessary for a signed offer, to purchase real estate, to become a contract?
Buyer's and seller's
A buyer and a seller agree on a purchase price of $200,000 for a house. The contract contains a clause stating that "time is of the essence." Which statement isTRUE?
If the closing date passes and no closing takes place, the contract may be rescinded by the party who was ready to settle on the scheduled date.
What action returns a contract's parties to their positions before the contract, including return of any deposit?
Rescission
A buyer and a seller enter a contract for the sale of a three-bedroom residential property. Shortly after the contract is in place, the buyer has an inspection done. As a result of the inspection, the buyer wants the seller to fix the fence and replace the garage door opener. The seller refuses. How should the parties proceed?
The fixes do not become part of the sales agreement.
A buyer and a seller enter a contract for the sale of a three-bedroom residential property. Shortly after the contract is in place, the buyer has an inspection done. As a result of the inspection, the buyer wants the seller to fix the fence and replace the garage door opener. The seller agrees. How should the parties proceed?
The parties must use an amendment form.
A person approaches an owner and says, "I'd like to buy your house." The owner says, "Sure," and they agree on a price. What kind of contract is this?
Unenforceable
A minor signed a sales contract to purchase a home. Which of the following describes this contract?
Voidable by the minor
An example of specific performance for breaching a real property purchase contract would be
a court action to force compliance with the contract.
Mutual agreement of a real estate contract is indicated by
acknowledgment.
The courts usually do NOTinquire into the
adequacy of the consideration provided in a contract.
A contract is said to be implied if the
agreement of the parties is demonstrated by their acts and conduct.
The transfer of rights or duties under a contract to a third party is called
an assignment.
A buyer has given her right under a sales contract to a third party but has not been released of the liability under the contract. This is called
assignment.
Rights and duties under a contract are transferred by
assignment.
An inspection contingency in a real estate sales contract provides that the
buyer may obtain certain inspections of the property, at the buyer's expense.
Once a contract has been agreed upon and signed by all parties
changes must be addressed through the use of an amendment.
An amendment
changes the contract.
In the period after an offer to purchase real estate is accepted and the sale is closed, the buyer acquires an interest in the property that is called
equitable title.
During the period of time after a real estate sales contract is signed, but before title actually passes, the status of the contract is
executory.
Should the buyer default, an example of liquidated damages to the seller in a purchase contract could be
forfeiture of the earnest money deposit.
In a standard sales contract, several words were crossed out or inserted by the parties. To eliminate future controversy as to whether the changes were made before or after the contract was signed, the usual procedure is to
have both parties initial or sign in the margin near each change.
A real estate professional uses earnest money placed in the company trust account to pay for the rent owed on the real estate professional's office. Using escrow funds for this purpose is
illegal.
The buyer of real estate takes possession but not legal title to property under a(n)
land contract.
The buyer has defaulted on a purchase contract, and the seller's only remedy is to keep the buyer's earnest money. In this case, the seller's remedy is known as
liquidated damages.
A void contract is one that was
never legally enforceable.
The property owner has given a potential buyer the right to buy the property at a set price for a set period of time; this is a(n)
option.
A buyer defaults on a purchase agreement, and the seller goes to court to force the buyer to buy. The seller's remedy is
specific performance.
If a buyer defaulted some time ago on a written contract to purchase a seller's real estate, the seller can still sue for damages if he is not prohibited from doing so by the
statute of limitations.
The period during which the parties to a contract may begin legal action to enforce their rights is determined by a state's
statute of limitations.
A buyer asks a court to enforce the provisions of a contract by bringing a
suit for specific performance.