Chapter 11

3. If an owner revokes an exclusive right of sale listing and sells the property during the remaining time the listing would have been in effect, what is the broker entitled to? (a) A full commission (b) Bring a suit for damages (c) Write off the loss on their income taxes (d) Revoke the listing contract

(a) A full commission

11. What is the term used to describe the consideration given by a buyer to indicate serious intent to buy a property? (a) An earnest money deposit (b) A check deposit (c) Legal tender (d) A boot deposit

(a) An earnest money deposit

4. Which term refers to a type of contract where all terms and conditions are NOT fully expressed? (a) Implied (b) Bilateral (c) Parol (d) Executory

(a) Implied

6. To which of the following does the phrase "meeting of the minds" refer? (a) Offer and acceptance (b) Consideration (c) Legal subject (d) Two or more parties

(a) Offer and acceptance

8. What is the term used to describe the party who receives an offer? (a) Offeree (b) Offeror (c) Optionor (d) Optionee

(a) Offeree

25. Which of the following would be a valid remedy for breach of a purchase and sale contract? (a) Sue for damages (b) File an Escrow Disbursement Order (c) Make a claim on the Recovery Fund (d) File a complaint with FREC against the licensee

(a) Sue for damages

17. What is the legal term that is used to designate the transfer of rights in a contract from one party to another? (a) Revocation (b) Assignment (c) Renunciation (d) Subordination

(b) Assignment

27. Which of the following list of actions contain valid ways that a contract could be terminated? (a) Performance, Rejection of the offer, or Renunciation (b) Breach, Performance, or Lapse of time (c) Assignment, Abandonment, or Breach (d) Consideration, Performance, or Revocation

(b) Breach, Performance, or Lapse of time

23. Which of the following statements is correct regarding the Statute of Frauds? (a) It requires all licensees to receive training in anti-fraud measures. (b) It requires certain contracts to be in written form to be enforceable in court. (c) It describes the time limit for the enforceability of written and oral contracts. (d) It is enforced by the Florida Real Estate Commission and the Department of

(b) It requires certain contracts to be in written form to be enforceable in court.

7. Which of the following best describes a contract? (a) A written instrument (b) Legally binding (c) Void unless accompanied by earnest money (d) Always bilateral

(b) Legally binding

19. Which of the following is an essential element of a valid and enforceable real estate sales contract? (a) At least one party must sign the agreement. (b) Offer and acceptance must be communicated by each party to the other. (c) The document must be prepared by an attorney. (d) The document must be under seal.

(b) Offer and acceptance must be communicated by each party to the other.

13. Which of the following establishes the time period for enforcement of a contract? (a) Statute of Frauds (b) Statute of Limitations (c) Real estate license law (d) State courts

(b) Statute of Limitations

22. Which of the following is correct regarding the "as is" provision in a sales contract? (a) Since the buyer has agreed to the "as is" provision, it is "buyer beware" because the seller does not have to disclose any defects. (b) The seller is still required to disclose all known defects that may materially affect the value of the property. (c) The "as is" provision helps to protect the broker from liability. (d) The buyer is required to have the property inspected, to ensure that there are no defects.

(b) The seller is still required to disclose all known defects that may materially affect the value of the property.

15. A real estate licensee is legally allowed to prepare all of the following types of documents, EXCEPT: (a) Purchase and sale contracts (b) Listings (c) Leases (d) Options

(c) Leases

5. What are the required elements of all valid contracts? (a) Legal subject, competent parties, legal age, and offer (b) Offer, acceptance, legal age, and legal subject (c) Legal subject, agreement, consideration, and two or more competent parties (d) Meeting of the minds, legal age, offer, and competent parties

(c) Legal subject, agreement, consideration, and two or more competent parties

21. A buyer and seller entered into a Purchase and Sale Agreement. The buyer chose not to close and defaulted on the agreement. The seller claimed the escrow deposit. What type of damages can be sought? (a) Liquidated damages to the buyer (b) Unliquidated damages to the buyer (c) Liquidated damages to the seller (d) Unliquidated damages to the seller

(c) Liquidated damages to the seller

1. Which of the following is an example of a unilateral contract? (a) Purchase and sale contract (b) Contract for deed (c) Open listing contract (d) Oral contract

(c) Open listing contract

24. An option contract is a unilateral contract that is binding upon which party? (a) Buyer (b) Grantee (c) Optionor (d) Optionee

(c) Optionor

20. A seller wishes to net $140,000 from the sale of a property. Closing costs are estimated to be $3,600, and the broker will receive a 7% commission. What sales price will pay the expenses and meet the seller's net requirement? (a) $150,538 (b) $153,400 (c) $154,138 (d) $154,409

(d) $154,409 140,000=3,600= 143,600 100%-7%=93% 143,600/.93=$154,408.6

12. All of the following may terminate an offer, EXCEPT: (a) Expiration of a reasonable or specified time period (b) The death of the offeror (c) A counteroffer (d) A failure to obtain a binder deposit

(d) A failure to obtain a binder deposit

14. A buyer negotiates a contract to purchase property, takes possession and pays the property purchase price in installments, but does not receive the legal title until the full purchase price has been paid. What is this agreement called? (a) An obvious attempt to defraud the buyer (b) A lease-option (c) A violation of the Statute of Frauds (d) An installment contract, contract for deed, or land contract

(d) An installment contract, contract for deed, or land contract

26. Offers may be terminated by all of the following, EXCEPT: (a) Acceptance (b) Rejection (c) Withdrawal (d) Breach

(d) Breach

9. Which of the following terms best describes a contract in which all of the terms and conditions have been fully performed? (a) Executory (b) Bilateral (c) Unilateral (d) Executed

(d) Executed

18. What type of contract exists when the court determines that a contract existed due to the actions of the parties? (a) Formal contract (b) Oral contract (c) Parol contract (d) Implied contract

(d) Implied contract

16. Which of the following statements is correct regarding an option contract? (a) It requires the buyer to buy at a specific price for a specific time. (b) It is binding upon the buyer. (c) It is a bilateral contract. (d) It gives a buyer the right to purchase for a specified time at a specified price.

(d) It gives a buyer the right to purchase for a specified time at a specified price.

10. Which statute requires a purchase and sale contract to be in writing to be enforceable? (a) F.S. 475 (b) F.S. 120 (c) Statute of Limitations (d) Statute of Frauds

(d) Statute of Frauds

2. In which circumstance is a broker's commission subject to forfeiture? (a) The broker has an oral listing contract. (b) The broker fails to obtain witnesses to a real estate sales contract. (c) The broker performs according to the employment contract. (d) The broker violates a fiduciary duty.

(d) The broker violates a fiduciary duty.

what are the two types of damages and how do they differ?

1) Liquidated - agreed in contract i.e., escrow deposit 2) Unliquidated - not in contract, compensatory damages, only way to get is in front of judge IE. person closed two week late and you needed to stay in a hotel. Sue for cost of hotel etc.

What are three types of contracts? Which one benefits the broker the most?

1) Open Listing - unilateral - oral or written, can not be on MLS as open contract 2) Exclusive agency listing - unilateral, oral or written, can be on MLS 3) Exclusive right of sale listing - bilateral - benefits the most, must be in writing, can be on MLS

What law prohibits the use of lead base paint?

Federal Law of Jan. 1 1978

What is meant when FS 720.401 is written on disclosure summary?

HOA disclosure - meaning it is mandatory membership

If you do not want to disclose what must you do?

Have it visible to the public

can an open listing go on MLS

NO

who is obligated in parties to an option?

Option, the owner of the property

What is the best way to terminate a contract?

Performance

What is consideration?

Promise to pay or love and affection. It can be verbal does not need a deposit

What is optional contract?

The right to buy at a specific period in time, at a specific price and is unilateral since they party has not promised to buy it.

T/F An 'as is' provision does not excuses or circumvent the duty to disclose material defects?

True

what is assignment of contract?

When the buyer signs over their rights in contract to another buyer to perform but ultimately first buyer is liable.

Why would you suit for performance ?

When you don't want deposit back but you want action. IE force the buyer to close on the contract

What is Procuring clause?

Willing, ready and able buyer

Does a S/A have to disclose all facts that materially affect the value of residential real property?

Yes if they are not readily observable to the buyer, includes the purchase and sale contract. When in doubt disclose

When must the property tax disclosure be presented to the purchaser?

disclosure summary must be represented at or before execution of the contract for sale

what is the best way to terminate a contract?

performance

Procuring clause mean?

willling, ready and able to buy