Contracts

Which of the following is an acceptable termination date for an enforceable exclusive listing of residential real property: - whenever the loan is funded - 90 days after listing agreement is signed - 3 days after notice of rescission of the seller - 90 days from the completion of construction

90 days after listing agreement is signed - In an Exclusive Listing only one agent can be hired. It requires a specific termination date (not 90 days from the completion of construction, rather 90 days from signing). If two exclusive listings are signed, the seller may be liable for two commissions.

In accordance to the Statute of Frauds, which of the following must be in writing? - A seaside rental from June 6 to September 6. - A 5-year lease for a commercial retail outlet. - A lease on a fruit or nut bearing tree for the time the fruit is in season so it can be picked. - A single-family residence offered for sale by owner.

A 5-year lease for a commercial retail outlet. - The Statute of Frauds sets forth what contracts are required to be in writing in order to be enforceable. Any contract that is not to be performed within one year must be in writing, as well as any contract related to real estate that results in compensation, such as a listing contract.

A contract between the seller of real property and a real estate licensee, whereby the seller agrees to pay the licensee a commission if he produces a "ready, willing, and able" buyer and the licensee agrees to use due diligence in procuring the buyer, is called: - bilateral contract - an unenforceable contract. - unilateral contract. - An invalid contract.-

A bilateral contract - listing is a bilateral employment contract between principal and broker whereby the broker is employed by the principal to find a buyer and accept a deposit.

Bob gave Bill an option for the purchase of Bob's property. In law, such an option is regarded as: - An agreement identical with the vendee/vendor relationship under a land contract - An involuntary lien on the real property - An offer to enter into a contract - A contract to keep the offer open

A contract to keep the offer open - An option is a contract to keep an offer to sell or lease real property open for a set period of time.

When one party is substituted for another party in a contract, the process is appropriately called a: - Redaction; - Rescission; - Novation. - Waiver;

A novation is the substitution of a new person for one of the parties to an agreement, on consent of all people involved. - A novation is the substitution of a new person for one of the parties to an agreement, on consent of all people involved.

The seller must provide the buyer with a real estate transfer disclosure statement in which of the following transactions: - A bankruptcy sale - A sale of a four unit residential building - A trustee sale - A husband to wife transfer

A sale of a four unit residential building - Transfer Disclosure Statement is required of the seller even if sold "as is" for sale of a four unit residential building .If the TDS is amended the buyer has 3 days to rescind out of the contract. If the TDS is defective the buyer has 2 years to sue the seller. The Seller should reveal all known defects but not repairs that are up to building code on the TDS. The Licensee can never complete the Seller's portion of the TDS.

Consideration may be which of the following: - labor - All of the other options may be considered consideration - money - a commitment

All of the other options may be considered consideration - A consideration is the inducement to a contract. It is the cause, motive, or compelling influence which induces a contracting party to enter into a contract. Consideration means something of value in the eye of the law and considered as such by both parties. It may be money, services, or a promise, and consists of either a benefit to the promisee or a loss or detriment to the promisor.

In which of the following contracts does one of the parties agree not to revoke an offer for a certain period of time: - A ratification - Estate for years - A Listing Contract - An Option

An Option - An Option is a contract to keep an Offer to sell or lease real property open for a set period of time. The Optionor cannot revoke the offer to sell during the designated period of time. An Optionee is under no obligation to buy the property in question. [The Optionee is NOT bound by the Option.]\

A contract which authorizes a real estate agent to sell a property during a specified time and allows that person to collect a commission if the sale is made by anyone, including the owner, is: - A net listing - An exclusive right to sell - An exclusive agency listing - An open listing

An exclusive right to sell

Which of the following statements BEST shows the difference between an exclusive right to sell and either an open or an exclusive agency? - An exclusive right-to-sell guarantees the listing broker a commission if he/she, or any other cooperating broker, procures a ready, willing and able buyer under the seller\'s terms and conditions; exclusive agency and open listing do not provide the same - An exclusive right-to-sell appoints only one agent; the others do not - An exclusive right-to-sell agreement enables the seller to negotiate a commission; the others do not - An exclusive right-to-sell agreement permits the seller to sell his house without paying a fee; the others do not

An exclusive right-to-sell guarantees the listing broker a commission if he/she, or any other cooperating broker, procures a ready, willing and able buyer under the seller\'s terms and conditions; exclusive agency and open listing do not provide the same

Which of the following statements BEST shows the difference between an exclusive right to sell and either an open or an exclusive agency? - An exclusive right-to-sell agreement permits the seller to sell his house without paying a fee; the others do not - An exclusive right-to-sell guarantees the listing broker a commission if he/she, or any other cooperating broker, procures a ready, willing and able buyer under the seller\'s terms and conditions; exclusive agency and open listing do not provide the same - An exclusive right-to-sell agreement enables the seller to negotiate a commission; the others do not - An exclusive right-to-sell appoints only one agent; the others do not

An exclusive right-to-sell guarantees the listing broker a commission if he/she, or any other cooperating broker, procures a ready, willing and able buyer under the seller\'s terms and conditions; exclusive agency and open listing do not provide the same - Exclusive agency, in fact, means that the seller will owe no commission if he finds his own buyer. Open listings are even riskier for brokers because they will lose the commission if the buyer or any other broker or salesperson provides a buyer.

A contract which, according to the Statute of Frauds, must be in writing in order to maintain a court action for enforcement is: - The employment of a broker to exchange leases on a property zoned for retail - The employment of a business opportunity to sell stock - A bill of sale on real property - Any agreement that will take longer than one year to complete.

Any agreement that will take longer than one year to complete. - The Statute of Frauds sets forth what contracts are required to be in writing in order to be enforceable. Any contract which cannot be completed within one year must be in writing.

By signing an exclusive right to sell listing, the seller is creating a contract between himself and the: - Buyer - Broker - The MLS - Sales Agent

Broker - A Listing is a Bilateral Employment Contract between principal and broker whereby the broker is employed by the principal to find a buyer and accept a deposit. It is the most essential element of an enforceable broker-principal relationship. The duration for a listing may be for any length of time agreed to by both the broker and the seller

Where a buyer withdraws his offer to purchase real property prior to acceptance by the seller, the: - Broker may sue buyer for specific performance - Seller may sue the buyer for specific performance and will probably win the suit. - Buyer is entitled to the refund of the earnest money deposit - Seller is entitled to one-half of the earnest money deposit;

Buyer is entitled to the refund of the earnest money deposit - There must be some type of offer and acceptance by the parties for the contract to be binding.

"Valuable," "good," " sufficient," and "adequate" are terms most closely associated with: - Consideration - Compensation - Performance - Bilateral contracts

Consideration - Consideration: One or more thing(s) of value that is/are exchanged in the contract (not necessarily money); ["Sufficient", "Valuable", "Good" and "Adequate" are all words that are often used to describe Consideratio

Which of the following is necessary for a real property conditional installment sales contract to be valid? - Lawful object, competent parties, offer and acceptance, legally sufficient writing. - Consideration, offer and acceptance, mutuality, competent parties, legally sufficient writing. - Consideration, offer and acceptance, lawful object, competent parties, legally sufficient writing. - Consideration, offer and acceptance, expressed time element, price.

Consideration, offer and acceptance, lawful object, competent parties, legally sufficient writing.

In order for an agreement for a transfer of real property to be binding on the buyer and seller it must: - Contain acknowledgement - Contain an offer and acceptance - Be typed - Be recorded

Contain an offer and acceptance

Which of the following events does NOT usually terminate a listing? - Death of either the selling broker or buyer - Expiration of the agreed upon time period - Death of either the listing broker or seller - Foreclosure on the listed property

Death of either the selling broker or buyer

Which of the following prevents a person from adopting a position, which is in conflict with a previous position or a previous action? - Doctrine of estoppels - Doctrine of good faith - Lis pendens - Fidicuary duty

Doctrine of estoppels - The Doctrine of estoppels prevents a person from adopting a position, which is in conflict with a previous position or a previous action.

A listing agreement is essentially a/an: - Employment contract - Option to sell - Purchase contract - A unilateral contract

Employment contract

During escrow, if an unresolved dispute should arise between the seller and buyer preventing the close of escrow, the escrow holder may legally: - Rescind the escrow and return all documents and monies to the respective parties - File an interpleader action in court - Consider the contract null and void - Arbitrate the dispute as a neutral party

File an interpleader action in court - As the result of an existing conflict between the Buyer and Seller, and the Deposit is turned over to the Court, this is referred to as an Interpleader.

The prospective purchaser may withdraw the offer at any time before the seller's acceptance of an offer: - Provided the offer is not a supported deposit - Unless the offer states that is irrevocable - Provided the offeree has breached the offer - For any reason

For any reason - Buyer may cancel for any reason prior to acceptance.

When zoning changes, but owners are allowed to continue with non-conforming uses, this is a: - acceleration clause - Grandfather clause - Non-conforming clause - Subordination clause

Grandfather clause

An optionor and an optionee make a contract for an option on a commercial piece of property. If the optionee decides to exercise his option, when must he perform? - He can exercise his option whenever he wants. - He must exercise his option when the optionor demands it. - He must exercise his option within 6 months under state law. - He must exercise his option under the terms of the option contract.

He must exercise his option under the terms of the option contract.

When the letters "HVAC" appear in a commercial or industrial lease, it normally refers to: - Heating, Ventilating, and Air Conditioning - High Voltage Alternating Current - Use of a Household Vacuum on the Average Carpet - Homesteads, Vacancies, and Additional Conveyances

Heating, Ventilating, and Air Conditioning

Broker Oscar brought in an offer but the listing agreement did not include an authorization to accept a deposit. Which of the following is correct? - None of the other options are correct - The authorization is implied. - Oscar cannot accept the deposit. - If Oscar accepts the deposit, he/she would do so as the agent of the buyer.

If Oscar accepts the deposit, he/she would do so as the agent of the buyer. - If the scope of authority of a real estate broker is limited to just producing a buyer, the broker does not have the authority to collect a deposit on behalf of the seller. When an agent does collect a deposit in this case, the agent is acting as agent for the buyer (offeror) and not the seller.

When must all the listings in an office be renegotiated? - If the broker dies - If the couple gets divorced - If there are multiple offers - A listing can never be renegotiated

If the broker dies - There are many reasons a listing CAN be negotiated. But it MUST be renegotiated when a broker dies because a listing is held by the broker

Which of the following would not make a contract voidable? - Fraud - Illegal purpose - Duress - Undue influence

Illegal purpose - A contract that has no legal effectiveness. For example, a contract that has an illegal purpose is simply void, NOT voidable.

Which of the following is created when possession and title do not occur at the same time? - Interim Occupancy Agreement - Writ of execution - Estate at Sufferance - Subordination clause

Interim Occupancy Agreement - An Interim Occupancy Agreement is created when possession and title do not occur at the same time

A voidable contract is one which: - Is subject to disciplinary action - Is binding on neither party and not subject to ratification - Has no force or effect - Is valid now but can be voided by an interested party for due cause

Is valid now but can be voided by an interested party for due cause - Voidable Contract is valid until it is rescinded. Examples of Voidable Contracts include contracts signed under duress, or contracts entered into with threat or menace.

What is a "liquidated damages" clause in a contract and is it legal? - It is a clause that specifies a certain dollar amount that will be paid in "damages" if a party breaches a contract. It is legal. - An amount over and above the amount due on a mortgage that a lender may collect as additional damages if a borrower defaults on a loan. It is not legal. - An amount the buyer of a new home may collect from a builder if a dwelling is not ready for occupancy within thirty days of the agree-upon closing date. It is legal, but not generally enforceable except in cases of gross failure to perform as promised. - A legal insurance clause that protects the buyer in case a property becomes damaged before escrow closes and he or she can take possession.

It is a clause that specifies a certain dollar amount that will be paid in "damages" if a party breaches a contract. It is legal. - Although legal, liquidated damages clauses aren't viewed with much favor by California courts because of the inherent vagueness about the true costs of "damages" and a tendency towards abuse.

An Option contract: - Keeps an offer open for a specified period of time - Requires the optionee to complete the purchase - Gives the buyer a lien on the property - Results in a commission to the broker if the optionee does not exercise the option

Keeps an offer open for a specified period of time

A safety clause is found in a: - Lease - Loan broker's statement - Deposit receipt - Listing agreement

Listing agreement - A Protection Period Clause (safety clause) in a listing will allow a broker to collect a commission for a specified period of time after the term of the Listing has expired. It is a designated period of time to close deals with prospects that the licensee has been working with during the term of the listing. This is not a time to find a new prospect. They must put the name of the prospects in writing at the end of the listing period in order to earn a commission during the protection period clause

Which of the following is NOT a type of listing contract? - exclusive agency - exclusive right to sell - MLS contract - open listing

MLS contract

The seller accepted an offer for the purchase of real property and an escrow was opened. Later the seller discovered misrepresentation on the part of the buyer. The contract: - Is void. - Is invalid. - May be voided by the seller. - Is valid as to the seller.

May be voided by the seller. - Such a situation would create a voidable contract. In other words it would give the seller the right to invalidate the contract because of the misrepresentation.

A broker and seller terminate the listing contract. An offer is received in the mail by the broker after the termination of the listing contract. The offer is for full price and includes all of the terms and conditions of the seller. Why is this NOT a valid contract? - No earnest money has been enclosed. - No acceptance has been given. - There is no current listing agreement. - There is no consideration involved.

No acceptance has been given. - It has not been presented to or accepted by the owner. Remember, contracts aren't valid until both parties agree. However, even though the listing agreement has expired, the offer should be presented. If it's accepted and the transaction closes, the broker will generally be entitled to his or her full commission.

Broker Dave has an exclusive agency listing to sell a $200,000 home for owner Jones. Before the listing expires, the home was sold through Jones' own efforts to a friend, and Dave was refused payment of any commission. Dave is legally entitled to receive from Jones: - A full commission - No commission - One-Half of a commission - All expenses that he incurred when the advertising the property

No commission

When part of an agreement is changed, or an agreement is replaced by a new one, it is a: - Abstract - Novation - Codicil - Amendment

Novation - Novation is a term used in contract law and business law to describe the act of either replacing an obligation to perform with a new obligation, or replacing a party to an agreement with a new party. A novation must be agreed upon by all original parties to the original agreement.

Which of the following is not a necessary element in the formation of a contract: - Performance - Acceptance - Consideration - Offer

Performance - The four legal essentials in any contract are: (1) consideration, (2) an offer and acceptance (i.e., a meeting of the minds), (3) a lawful object, and (4) competent parties. Some contracts require writing as well. - CApable Parties, Lawful, Consideration, Offer & Accep (CPLACOOP)

Carol signs a listing agreement. What is included under the section "Terms of the Sale" on Carol's agreement? - Price, method of payment, and personal property - Terms of sale, personal property, and additional terms - Loan amount, personal property, and compensation to broker - Price, compensation to broker, and deposit

Price, method of payment, and personal property - The "Terms of the Sale" section in a listing agreement lists the price and how the price is to be paid. It also discusses any personal property which is included in the price.

All of the following are essentials of each and every contract, except: chemistry - Proper writing - Lawful object - Mutual consent - Capable parties

Proper writing - A valid contract does not necessarily have to be in writing, nor does it necessarily have to require performance to be valid. The four essentials are Mutual consent, Lawful object, Capable parties, ConsiderationA valid contract does not necessarily have to be in writing, nor does it necessarily have to require performance to be valid. The four essentials are Mutual consent, Lawful object, Capable parties, Consideration

Which of the following is NOT required for a contract to be legally binding? - A lawful object. - Proper writing. - Mutual consent. - Capacity.

Proper writing. - Not all contracts need to be in writing to be legal and enforceable. However, certain types of contracts- including those for real estate transactions- do need to be in writing. In part because of the dollar amounts typically involved, but more importantly to maintain a clear, documented title history.

If a principal no longer desires the broker to act for him during the period of an exclusive right to sell listing, he may: - Revoke the agency created by the listing contract but not be liable for damages - Revoke the agency created by the listing contract but may be liable for damages - Be forced to sell his property - Not revoke the agency because an exclusive right to sell listing is an irrevocable contract

Revoke the agency created by the listing contract but may be liable for damages - A Seller can terminate a Broker before the expiration of the Listing, but he may be liable for damages to the Broker in this instance.

Which of the following requires real estate listings to be in writing? - Statute of Frauds - Statute of limitations - Department of Real Estate - CAR

Statute of Frauds - The Statute of Frauds generally requires all contracts for the sale of land or any interest therein (including listings) to be in writing.

Where in a Real Estate Listing are the seller's exact terms and conditions? - Terms of sale clause - Contingency clause - All of the other options are correct - subordination clause

Terms of sale clause

The effective date of a real estate purchase contract is the date that: - The acceptance is communicated to the buyer - The security deposit made - The seller accepts - The offer is made

The acceptance is communicated to the buyer - Mutual agreement is a 3 step process. Offer, acceptance and communicate back the acceptance.

In which of the following situations could a broker receive no commission? - The broker proves that he is the procuring cause of the buyer in a net listing - The broker proves that he is the procuring cause of the buyer in an exclusive right to sell listing - The broker proves that he is the procuring cause of the buyer in an open listing - The broker proves that he is the procuring cause of the buyer in an exclusive agency listing

The broker proves that he is the procuring cause of the buyer in a net listing - In all of the other listings, if the broker proves that he is the procuring cause, they would earn a commission. However a net listing is an employment contract in which the broker receives, as commission, all excess monies over and above the minimum sales price agreed on by broker and seller. Therefore if he brings in an offer at or below the sales price then he would get no commission. This is why net listings are illegal in many states, because of the inherent conflict of interest.

Broker Pam Wilson sold Matt Cohen a small "starter" home. During the closing process it was discovered that Matt was not nineteen as he claimed, but a seventeen year old unemancipated minor. What is the status of the contract? - The contract is void. - It's enforceable since an offer was made and accepted. - Matt's parents can be forced to complete the transaction. - The contract is voidable.

The contract is void. - In California, minors are not allowed to enter into contracts for real property per California Family Code section 6701, making this contract "Void". Minors can enter into some other contracts, however, and those contracts can be voided by the minor because of lack of sufficient age. In those cases, the contract is "Voidable" by the minor but not by the other party.

Mr. Daniels made a written offer to purchase a home through Broker Starr. However, Daniels died in a car accident before Broker Starr could notify him of a qualified, signed acceptance by the seller. Which of the following statements is most correct? - The contract would not be binding because the deed had not been delivered into escrow. - The death of Daniels constituted a termination of the offer. - The acceptance does not have to be communicated to the buyer. - Notification of acceptance to the executor would bind the Daniels estate.

The death of Daniels constituted a termination of the offer.

Henry made an offer to purchase real property. However, he died of a heart attack before the listing broker could notify him of an unqualified, signed acceptance by the seller. Based on these facts, which of the following is true: - Notification to the administrator or executor would bind the estate - The sale would not be binding because the deed was not delivered before Henry's death - The offer and acceptance constitute an enforceable contract - The death of Henry constituted a revocation of the offer.

The death of Henry constituted a revocation of the offer.

Henry made an offer to purchase real property. However, he died of a heart attack before the listing broker could notify him of an unqualified, signed acceptance by the seller. Based on these facts, which of the following is true: - The offer and acceptance constitute an enforceable contract - The sale would not be binding because the deed was not delivered before Henry's death - Notification to the administrator or executor would bind the estate - The death of Henry constituted a revocation of the offer.

The death of Henry constituted a revocation of the offer.

Regarding a promissory note when getting financing: - The deed of trust secures the promissory note. - The grant deed secures the promissory note. - The promissory note is not part of the deed of trust. - A promissory note secures the deed of trust.

The deed of trust secures the promissory note. - The deed of trust secures the promissory note and the property. If payment is not made according to the terms of the note and deed of trust, the beneficiary may instruct the trustee to foreclose as set forth in the deed of trust.

Which of the following statements about options is false? - Consideration must be given by the optionee to the optionor - The option binds the optionee to the performance - The optionee does not have any rights in the land - A lease option is a unilateral contract

The option binds the optionee to the performance - An optionee is under no obligation to buy the property in question, so the optionee isn't bound to perform the option contract- it is their "option" to buy it or not. To create an option contract however, the optionee must have provided consideration to the optionor for the unilateral contract that keeps the option open, should the optionee choose to purchase the property. And the optionee doesn't have any rights in the land until the exercise the option and purchase the property.

Which of the following is NOT true about an option? - The optionee has no interest or estate in the property until the option is exercised. - The optionor can revoke the offer to sell during the designated period of time. - The option rights are assignable unless otherwise noted. - The optionor retains the money paid for the option even if unexercised.

The optionor can revoke the offer to sell during the designated period of time. - Keyword: NOT - The optionor CANNOT revoke the offer to sell during the designated period of time. The optionor is bound to perform if the optionee decides to exercise his/her option- it is a unilateral contract. - NOTE - This question asks "which... is NOT true" which means it's looking for a false answer, and it's false that the optionor can revoke the offer to sell during the designated period of time.

Salesperson Rose has several listings and is an agent of Broker Leigh. These listings are: - The property of Salesperson Rose and Broker Leigh - Void if Salesperson Rose changes brokers - The property of Broker Leigh - The property of Salesperson Rose

The property of Broker Leigh - The listing agreement is a contract between the broker and the seller. It remains the property of Broker Leigh if Salesperson Rose changes brokers and the listing remains valid.

Assume a broker took an open listing and made an oral agreement with another broker to share the commission on a property. The second broker procured an offer resulting in the sale of the property. If the first broker refused to share his commission on the sale, which of these statements is most accurate? - He need not share the commission due to the statute of frauds - He need not share the commission, as it was an open listing - The second broker should appeal to the Department of Real Estate - The second broker would stand a good chance of winning a court suit for his share of the commission

The second broker would stand a good chance of winning a court suit for his share of the commission - If a broker took a listing and made an oral agreement with a second broker to share the commission, then refused to share the commission when the second broker procured an offer resulting in a sale, there is a good chance that the second broker could win a lawsuit for his share of the commission. - NOTE - This question is about the oral contract between the two brokers, not the listing agreement.

Stephen signs a real estate contract. Most real estate contracts contain pre-printed clauses or spaces for information to be added in writing. In the interpretation of Stephen's contracts: - The written parts and the pre-printed parts are given equal consideration. - Pre-printed parts take precedence over the written parts. - The written parts take precedence over the pre-printed parts. - No changes or amendments to the pre-printed clauses are permitted by law.

The written parts take precedence over the pre-printed parts.

To assign a contract for the sale of real estate means to: - Permit another broker to act as agent for the principal. - Allow the seller and the buyer to exchange positions. - Transfer one's rights under the contract. - Record the contract with the county recorder's office.

Transfer one's rights under the contract.

A contract based on an illegal consideration is: - Enforceable - Valid - Void - Voidable

Void

Tenant Albert agrees to perform certain property repairs for owner Bob. Despite repeated promises, Albert fails to perform the repairs. Bob then writes up a contract, and compels Albert to sign it by threatening to evict him if he doesn't. Such a contract would be: - Illegal - Voidable - Void - Enforceable

Voidable - A voidable Contract is a contract that may be rejected by either of the parties. It is valid until it is rescinded. Examples of voidable contracts include contracts signed under duress, or contracts entered into with threat or menace. Any time you are forced to enter into a contract when you do not want to do, the contract is voidable.

Tenant Albert agrees to perform certain property repairs for owner Bob. Despite repeated promises, Albert fails to perform the repairs. Bob then writes up a contract, and compels Albert to sign it by threatening to evict him if he doesn't. Such a contract would be: - Void - Illegal - Enforceable - Voidable

Voidable -A voidable Contract is a contract that may be rejected by either of the parties. It is valid until it is rescinded. Examples of voidable contracts include contracts signed under duress, or contracts entered into with threat or menace. Any time you are forced to enter into a contract when you do not want to do, the contract is voidable.

The duration of a listing agreement is: - 3 months - 90 days - 6 months - Whatever is negotiated between the Broker and seller

Whatever is negotiated between the Broker and seller

Janice Riceland is shown a home by her agent, Richard. She makes an offer and gives Richard a check. At what point does her offer become an enforceable contract to buy? - As soon as Richard receives her offer and her check. - When the deposit check clears. - As soon as the seller receives the offer and the check. - When Janice is notified the seller accepts the offer.

When Janice is notified the seller accepts the offer. - Offers are serious business. Once accepted, they cannot be withdrawn without penalty, such as loss of the deposit.

A contract is said to be fully executed when: - The party employed by the contract has completed their task - Upon acknowledgement of receipt of the contract - Upon signing of the contract - When both parties have completely performed their designated tasks

When both parties have completely performed their designated tasks

When may a real estate broker, serving as agent of the seller, refuse to transmit an offer to the principal: - When the owner has already accepted a "back-up" offer; - When the broker is acting as a gratuitous agent; - Never. - When the broker is acting on the express instructions of the principal in his refusal;

When the broker is acting on the express instructions of the principal in his refusal; - An agent is employed to carry out the instructions of the principal, they can advise the principal in what to do, but at the end of the day they work for the principal and must carry out the principal's instructions as long as those instructions are lawful.

A bilateral contract is a contract that: - one party agrees to perform. - applies only to leases. - a promise by one party is given in exchange for a promise by another party. - one party is given an option to perform.

a promise by one party is given in exchange for a promise by another party. - A contract in which each party promises to perform an act in exchange for the other party\'s promise to perform.

When leasing commercial property that is merely a "shell" space, the landlord often agrees to spend a specific amount to help a qualified tenant build the space out. This amount is designated as: - earnest money deposit. - a tenant improvement allowance. - a security deposit. - a rent abatement.

a tenant improvement allowance.

A listing agreement is a legal: - rental agreement. - novation. - assignment agreement. - contract between the seller and a broker that establishes their agency or non-agency relationships.

contract between the seller and a broker that establishes their agency or non-agency relationships.

Mr. Seller signs an open listing on his home with five different brokers. In this case: - each broker has an opportunity to earn the entire commission. - the brokers will split the commission five ways regardless of who sells it. - the owner must pay a full commission to all five brokers when it sells. - the owner must pay the first broker to take the listing no matter who sells it.

each broker has an opportunity to earn the entire commission.

In order to be entitled to a commission, a broker must show that he/she was the procuring cause of the sale under all of the following types of listings except a(n): - non-exclusive listing. - exclusive agency. - open listing. - exclusive authorization and right to sell.

exclusive authorization and right to sell.

In order to be entitled to a commission, a broker must show that he/she was the procuring cause of the sale under all of the following types of listings except a(n): - exclusive authorization and right to sell. - non-exclusive listing. - exclusive agency. - open listing.

exclusive authorization and right to sell. - An exclusive authorization and right to sell listing is a contract in which the seller agrees to sell the property in question through the listing broker only. The listing broker does not need to show that they are the "procuring cause" of finding the buyer- under an exclusive authorization and right to sell listing, the broker gets paid no matter who brings the buyer.

In order to be entitled to a commission, a broker must show that he/she was the procuring cause of the sale under all of the following types of listings except a(n): - open listing. - exclusive agency. - exclusive authorization and right to sell. - non-exclusive listing.

exclusive authorization and right to sell. - An exclusive authorization and right to sell listing is a contract in which the seller agrees to sell the property in question through the listing broker only. The listing broker does not need to show that they are the "procuring cause" of finding the buyer- under an exclusive authorization and right to sell listing, the broker gets paid no matter who brings the buyer.

All of the following listings require that the broker be the "procuring cause" of the sale if he/she is to be entitled to a commission, EXCEPT: - All listings require proven procuring cause - exclusive listing. - exclusive right to sell listing. - open listing.

exclusive right to sell listing. - Under an Exclusive Authorization and Right to Sell Listing, the listing broker is entitled to a commission if the property sells through the efforts of the broker or any other person. The broker is not required to produce a buyer or be the procuring cause to be entitled to a commission.

The basic purpose of a listing agreement is to authorize the broker to: - sell the house. - market the house. - negotiate the contract. - find a buyer.

find a buyer.

Four months ago, a seller entered into a legally binding written contract to sell his property. Later, the seller refused to complete the transaction since he felt the value of the property would increase in the near future. Under these circumstances, the Statute of Limitations could affect the rights of the buyer to prevail in a civil action due to a breach of the written contract within: - four years. - 90 days. - two years. - one year.

four years. - A right rising out of a written contract must be pursued in court within four years of the default (breach), according to the Statute of Limitations.

Broker Seddon takes an exclusive listing on a property owned by three different people. Broker Seddon takes the listing contract to each of their places of business to get it signed. Broker Seddon must: - give a copy to each owner when he/she signs. - get them together in one place to sign at the same time. - give one copy to any of the three owners. - give a copy to the first owner who signs only.

give a copy to each owner when he/she signs.

A broker used the following clause in his exclusive listing contract: "In consideration of the execution of the foregoing, the undersigned broker agrees to use diligence in procuring a purchaser." This clause: - is important to the creation of a bilateral contract - is superflous and unneccessary in the current contracts - is neccessary for the creation of a unilateral contract - requires that the broker advertise the property

is important to the creation of a bilateral contract - Bilateral Contract is a promise given by one party in exchange for a promise by a second party; the contract is binding on both parties to perform. - An example of a clause that, if included in a broker's listing, would create a Bilateral Contract is: "In consideration of the execution of the foregoing, the undersigned broker agrees to use diligence in procuring a purchaser."

Broker Kim took a 90-day exclusive agency listing to sell Joe's property. After 30 days, Kim still hadn't sold the property so Joe sent her a certified mail letter canceling the listing. One week later, Joe listed the property with several brokers using open listings. Two weeks later, one of the brokers who had an open listing on the property completed a sale to new owners. In this situation, Joe most likely: - owes commission to the selling broker only. - had a right to re-list property and cancel Kim's listing, and his notice of cancellation would accomplish this without possible liability to Joe. - did not have the right to give open listings to other brokers. - is liable for payment of commission to Kim as well as to the selling broker.

is liable for payment of commission to Kim as well as to the selling broker. - An exclusive agency listing is a bilateral employment contract that guarantees a commission to the exclusive agent if any licensee procures a buyer (although the owner can procure a buyer without paying a commission). Joe can't "unilaterally" decide to cancel an employment contract- that requires mutual consent. So even though Joe sent a certified letter, if Broker Kim didn't agree to cancel the contract, the listing is still enforceable and Joe could be liable to for both commissions.

Under a lease, the leasehold interest is with the: - lessor. - lessee. - landlord. - Owner of the property

lessee - A "leasehold interest" is the right to exclusive possession and use of real property for a fixed period of time held by the lessee. Remember: lessor(landlord), lessee (tenant).

The document that defines the relationship between the broker and the seller is the: - listing agreement. - exclusive agency contract. - purchase contract. - disclosure statement.

listing agreement.

Mr. Seddon, an owner of a property, enters into an exclusive listing with Broker Sparks. One week later, Broker Sparks brings in a full price offer, but Mr. Seddon refuses the offer. Seeking an action of Specific Performance would be an option for: - broker Sparks. - neither the buyer nor broker Sparks. - the buyer. - both the buyer and broker Sparks.

neither the buyer nor broker Sparks. - Specific performance is an action brought in a court of equity to compel a party to carry out the terms of a contract, and in this case there was never a contract between the buyer and seller since the offer was refused. Specific performance is not used to specifically enforce a contract to perform personal services, such as a broker's agreement to find a buyer. - In regards to real estate, suits for specific performance might be filed by a buyer wishing to force a seller to follow through with a purchase agreement. In this case, Broker Sparks would most likely sue for monetary damages equal to the commission that would've been earned had Mr. Seddon accepted the offer.

A property owner lists his property for sale with a broker. During the negotiations, the owner told the broker that the owner wanted $138,000 for the property, and anything above that amount the broker could keep as his commission. The listing with this type of provision is known as the: - open listing. - net listing. - non exclusive listing. - gross listing.

net listing.

Susan who is a buyer, has entered into an agreement with more than one buyer's agent at the same time but owes compensation only if she uses the services of a buyer's broker. Susan's arrangement is known as a(n) - exclusive agency agreement - multiple-listing agreement. - exclusive right agreement. - open agreement

open agreement

Under a lease for a commercial property, a tenant agrees to pay $4,000 per month plus 3% of the gross monthly sales. This type of lease is called a: - net - ground - triple net - percentage

percentage

The primary purpose of a listing agreement is to: - serve as a contract of employment between the owner and the broker. - give the broker permission to sell all of his principal\'s properties. - list all improvements and amenities of the property. - serve as a guide for a sales contact.

serve as a contract of employment between the owner and the broker.

Andrew has holographic will. Holographic wills cannot be: - None of the other options are correct - written in anything other than ink - signed with an "X" - written with colored ink

signed with an "X" - Since a holographic will is handwritten, it is assumed that the person is capable of signing his/her full name.

The law that requires real estate contracts to be in writing to be enforceable is the: - parole evidence rule. - statute of frauds. - statute of limitations. - law of descent and distribution.

statute of frauds. - Contrary to popular belief, the statute of frauds is not about specific actions defined as fraud, but the requirement in every state that certain documents be in writing, especially those pertaining to real estate. It's called the statute of frauds because it was first enacted in England in 1677 to prevent fraudulent claims of title.

All of the following are essential elements of every valid contract, except: - a legal act. - a meeting of the minds. - the payment of money. - adequate capacity of parties.

the payment of money. - The four essentials of a valid contract is Meeting of the minds, Capable parties, Lawful object and Consideration. Consideration is the promise of payment of some sort- it doesn't have to be money, it can be anything of value. But the actual payment of money is performance of the contract, not Consideration.

All of the following are essential elements of every valid contract, except: - the payment of money. - a meeting of the minds. - a legal act. - adequate capacity of parties.

the payment of money. - The four essentials of a valid contract is Meeting of the minds, Capable parties, Lawful object and Consideration. Consideration is the promise of payment of some sort- it doesn't have to be money, it can be anything of value. But the actual payment of money is performance of the contract, not Consideration.

In a real estate purchase contract, the liquidated damages clause is initialed and the buyer defaults. The deposit should be: - no more than 3% of the selling price or the amount of the deposit, whichever is less. - given to the seller when escrow is opened. - used to cover liquidated damages for both the seller and listing broker. - used to pay any escrow expenses and the balance returned to the buyer.

used to cover liquidated damages for both the seller and listing broker. -If a buyer defaults and the liquidated damages clause is initialed, the deposit should be used to cover damages for both the seller and the listing agent (after expenses are paid). However, the listing agent will never get more than his agreed-upon commission.

In a real estate purchase contract, the liquidated damages clause is initialed and the buyer defaults. The deposit should be: - used to cover liquidated damages for both the seller and listing broker. - given to the seller when escrow is opened. - no more than 3% of the selling price or the amount of the deposit, whichever is less. - used to pay any escrow expenses and the balance returned to the buyer.

used to cover liquidated damages for both the seller and listing broker. - If a buyer defaults and the liquidated damages clause is initialed, the deposit should be used to cover damages for both the seller and the listing agent (after expenses are paid). However, the listing agent will never get more than his agreed-upon commission.

Seller Smith sold a home to buyer Jones under contract. Shortly before close of escrow, it was judicially determined that Jones was incompetent prior to entering into the contract with Smith. The contract between Smith and Jones is: - void - voidable - unenforceable - enforceable

void - If Jones was legally incompetent before entering into the contract with Smith, the contract was void at its inception. - A void contract cannot be enforced by law. Void contracts are different from voidable contracts, which are contracts that may be nullified.

Seller Smith sold a home to buyer Jones under contract. Shortly before close of escrow, it was judicially determined that Jones was incompetent prior to entering into the contract with Smith. The contract between Smith and Jones is: - voidable - void - enforceable - unenforceable

void - If Jones was legally incompetent before entering into the contract with Smith, the contract was void at its inception. A void contract cannot be enforced by law. Void contracts are different from voidable contracts, which are contracts that may be nullified.

Undue influence or duress applied to one party to a contract makes the contract: - voidable. - unenforceable. - invalid. - void.

voidable - Because all parties must enter a contract willingly and believe that doing so is in their best interests, attempts to influence an unwilling or reluctant participation can render the contract void. The court must be petitioned and agree before the contract becomes void.

Undue influence or duress applied to one party to a contract makes the contract: - unenforceable. - voidable. - void. - invalid.

voidable. - Because all parties must enter a contract willingly and believe that doing so is in their best interests, attempts to influence an unwilling or reluctant participation can render the contract void. The court must be petitioned and agree before the contract becomes void.