Contracts/ Financing not sure 17 %

Jeffrey has accepted an offer of $299,000 for his house. The buyer is making a $50,000 down payment and the buyer's appraisal came in at $300,000. On what number will the buyer's lender base the loan-to-value ratio?

299000

Which of the following best describes annual percentage rate (APR)?

A standardized measure for interest rates and other loan costs

Elaina and Allen just purchased a home using a deed of trust. Which of the following is most likely true about their home loan?

A trustee will hold title until the loan is paid

Camille, a buyer, wants to change the price already agreed to in a sales contract. She should use a(n) ______.

Amendment

How does the lender determine whether the property is worth the sales price?

Appraisal

Saul was unhappy after he and Janelle liquidated their business. Janelle sold some items for less than he'd initially agreed to and he wanted the full price to be included in the profit split. He wanted to sue, but he was required to pursue other options. What contract clause kept Saul from being able to sue?

Arbitration

Sam's not very good with planning for his expenses. He has a mortgage payment that includes his property taxes and property insurance (PITI), so he can knock those all out with his mortgage payment every month. Sam's also happy to know that his monthly payment will remain the same for the life of his loan. What type of mortgage does Sam have?

Budget

Gail was supposed to close on her new home by the end of May, but she kept asking the sellers if they could push the closing back. Even after the summer was over the transaction still hadn't closed. Gail was guilty of not adhering to which aspect of the contract?

Time is of the essence

Jerry and Lewis have entered into a sales contract. They're about three weeks into the transaction, with several terms of the agreement yet to be met. What type of contract do Jerry and Lewis have?

Executory

Desmond has a signed listing agreement with his clients, the Harpers. In exchange for helping the Harpers list, market, and sell their home, the Harpers have agreed to pay Desmond a commission. What type of contract do Desmond and the Harpers have?

Bilateral

tristan's offer has been signed by all parties and delivered back to the seller. This means that ______ has occurred.

Binding acceptance

When considering loan risk, which two items will lenders consider in equal measure?

Borrower an property

Breanna signs a contract offering to purchase Kathy's home for $150,000. Kathy replies, "No way," but offers to sell it to her for $200,000. Breanna agrees to these terms and they add their signatures. Which of the following statements is correct?

Breanna accepted the offer Kathy made.

Hannah wasn't able to get the financing to open her boutique, so her mother came on as a silent partner and provided additional cash. Hannah and her mother have an agreement that states Hannah's mother can't be held financially or legally liable if there are any problems with the store. What type of contract clause is this?

Indemnification

Which offer would be the most appealing to a seller?

It depends on the needs and motivations of the seller.

The Bransons have a conventional loan for which they were required to obtain private mortgage insurance. Their local real estate market has been on fire lately, and their house is now appraised at twice their loan balance! Will their PMI be automatically cancelled?

Maybe, but they'll have to petition their lender.

Kendra made an offer on Sam's property. Sam rejected Kendra's offer, but made a counter-offer. Kendra is now considering the counter. What is Kendra in this scenario?

Offeree

Kendra made an offer on Sam's property. Sam rejected Kendra's offer, but made a counter-offer. Kendra is now considering the counter. What role does Kendra have in this scenario?

Offeror

Which of the following is a potential disadvantage for a buyer who enters into a lease with an option to buy contract?

The buyer/lessee could lose any funds credited to the purchase price if he breaches the lease's terms.

Your 15-year-old son just signed a contract joining a health club, which costs $50 a month. Is this contract valid?

Yes, the contract is valid.

Because Shelby has a high prepayment penalty on her high-interest loan, she is ________.

Unable to refinance her high-interest subprime loan without paying a stiff penalty

What's a good policy that a buyer's agent should employ regarding contingencies?

Use contingencies judiciously to protect the clients and the deal.

Sgt. Johnson is an active member of the Marines. He's been serving for 10 years. He wants to buy a home with no money down. What loan option seems like the best fit?

VA

Kenneth enters into a contract to sell his home to Valerie, who puts down a $5,000 earnest money deposit. At the last minute, Valerie backs out of the deal. Kenneth keeps the earnest deposit. This is an example of ______.

Accepting liquidated damages

What happens to an initial offer from the buyer after a seller counters?

It's no longer in play

What factors directly affect an adjustable rate mortgage?

Rate, index, and margin

Jerry and Simon signed a contract so that Jerry could purchase all of Simon's restaurant equipment for one price after Simon closes his restaurant next month. The contract contains a provision that states Jerry has one year from the purchase date to file a suit relative to the purchase. After the year is up, Jerry forfeits the right. What kind of contract clause is this?

Statue of limitations

What's the meaning of "good faith" in relation to contract law?

The parties agree that they'll execute the contract to the best of their ability and without any fraud or misrepresentation

What's the meaning of "good faith" in relation to contract law?

The parties agree that they'll execute the contract to the best of their ability and without any fraud or misrepresentation.

Which of the following clauses directs the parties to a real estate sales contract to proceed in good faith, and not unduly delay the process?

Time is of the essence clause

How's interest defined as it's related to a mortgage loan payment?

A fee paid to lenders for the use of their money

Sondra, a buyer, signs all the required mortgage documentation, and promises to make all payments to her lender. Unfortunately, Sondra falls on hard times and misses multiple payments, and the bank indicates that it is going to foreclose on her. The foreclosure proceedings are more difficult for the lender because Sondra holds the title to the land. What kind of state does Sondra live in?

A lien theory state

Leonard is offered a loan at 5.75%. Because he plans to be in his home for several years, he chooses to pay points up front to have the rate reduced to 5.25%. What's this an example of?

Buydown

Which of the following is an example of an escalator offer?

Buyer offers $650,000 with clause that buyer will beat all competing offers by $3,000 up to $675,000.

In an amortized loan, the interest portion of the mortgage payment generally ______ over the life of the loan.

Decreases

Fred is an agricultural lender who helps the ranchers and farmers in his community by providing credit for purchasing land, making repairs to their buildings, and improving their agricultural property. He's able to do this in part because of the ______ offered by the USDA Farm Service Agency.

Guaranteed loans

Tawna agrees to sell her small plot of land to Morris for $5,000 cash. They don't write up a contract, but otherwise all the necessary elements for a valid contract are in place. What's the status of this contract?

It's valid but not enforceable.

Samuel and Yoshi have worked at the same firm for a few months and get along well. Samuel mentions he has a credit score in the low 800s. Yoshi, who's just starting out, persuades Samuel to sign for a loan to help Yoshi buy a property, since his credit isn't good enough. Yoshi promises to make the mortgage payments, but two months after the deal closes, Yoshi moves across the country. Samuel's now stuck with a $400,000 mortgage. What type of scheme is this?

Straw buyer

Seller Gina feels awful that Martha, who was going to buy Gina's property, lost her job. Gina decides to ______ Martha from her obligation to pay earnest money, so that money is returned to Martha.

Released

You're explaining to your client that using electronic documents and signatures simplifies the homebuying process. Your client is skeptical about these signatures. You describe the Uniform Electronic Transactions Act (UETA) and tell your client that ______.

State laws take precedence over UETA

Katelyn really wants to include an inspection contingency in her purchase offer. Her agent explains that the inspection contingency only documents which of the followiing?

The date by which all inspection issues must be addressed

Ken signed a contract to purchase Debra's condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in their state. Debra found out about his age prior to the closing but honored the contract and they closed on the condo a month after Ken's birthday. What was the status of the contract when Ken and Debra entered into it?

Voiadable

Sondra thinks the new business contract she's signed with her business partner is valid. Both parties are legally competent, the purpose is a business transaction so it's a legal purpose, an offer was made and accepted, and a fee has been negotiated and documented. Which essential element of a valid contract has Sondra not yet considered?

Weather consent was voluntary

Tristan's offer has been signed by all parties and delivered back to the seller. This means that ______ has occurred.

binding acceptance