RE CH 7 - Contracts

Filing a termination statement

A Uniform Commercial Code Financing Statement (UCC-1) is removed from record by:

Unenforceable at the option of the seller

A broker enters into an oral listing agreement with a seller and locates a suitable buyer who purchases the property. Payment of a commission to the broker is:

The contract is fully enforceable

A broker presented a written offer to their seller from a buyer. The offer stated that upon acceptance, the buyer would deposit $25,000 in escrow. The seller made a counteroffer but did not change the amount of the deposit and sent it back to the buyer. The buyer agreed to all the changes but lowered the amount of the deposit to $10,000. Which of the following statements is not correct?

The broker needs to accept the promissory note but must notify the seller the deposit is in the form of a promissory note

A broker receives an offer from a buyer. The deposit is in the form of a personal promissory note for $20,000 payable to the seller in 60 days, plus 10% interest. Which of the following is true?

Were the procuring cause of the sale

A broker who has a nonexclusive listing may be legally entitled to a commission when they prove they:

After the term of the listing agreement

A broker's fiduciary obligation to protect a seller's confidential information continues:

Given to the seller after the default

A buyer and seller initial the liquidated damages clause in a real estate purchase agreement. The buyer later defaults. The amount recoverable is:

Legal description

A contract for the sale of rural property requires a:

Completely and fully performed

A contract has been fully executed when it has been:

Unenforceable

A husband signed a contract to sell community real estate without his wife's signature. The contract is:

Is not enforceable

A land sales contract clause which prohibits any prepayment at any time after the year of the sale:

15 calendar days

A landlord is required to provide a copy of the written lease to the tenant within:

Exclusive possessory interest

A lease conveys a(n) _____________ in real estate to a tenant.

Giving legal advice, giving tax advice, and potential discrimination violations

A licensee who designates how title is to be vested without any discussion with their buyer while filling out the purchase agreement may be guilty of:

A promise for a promise, a bilateral contract, or an executory contract

A listing agreement can be described as:

Bilateral executory contract

A listing agreement in which a seller agrees to pay a broker a commission if they produce a "ready, willing, and able" buyer and agree to use due diligence in procuring a buyer is an example of a(n):

Escrow is closed

A listing broker needs to present all offers until:

Is important for the creation of a bilateral contract

A listing contract contains a clause stating that the seller agrees to pay a commission in exchange for the broker's agreement to use diligence in procuring a buyer. This clause:

Laches

A lost right caused by an unreasonable delay in the pursuit of a claim is called:

Voidable

A party to a contract is coerced or placed under duress by another contract participant. At the discretion of the injured party, the contract is:

The seller's acceptance has been communicated to the buyer

A real estate buyer can rescind an offer until:

How a dispute is to be resolved if there is a disagreement

A real property land sales contract does not need to show:

Four years from the seller's breach

A seller accepts a written offer to purchase their property. Later, the seller refuses to perform to complete the transaction. Under the Statute of Limitations, the buyer needs to file a civil action due to the seller's breach of a written contract within:

Both the seller and their broker

A seller insists on selling their property "as is" and refuses to disclose known problems on the Transfer Disclosure Statement (TDS). The broker is aware the roof leaks, but does not inform the buyer who purchases the property. The buyer can sue:

The listing broker employed by the seller

A seller of a property is not bound by the acts and representations of the following, except:

Rescinded

A voidable contract remains binding upon the parties until the contract is:

Exchange agreement

A(n) _________ is an example of a bilateral contract in which both the offeror and the offeree are grantors.

Counteroffer

A(n) __________ may be made to an offer received consisting of terms different from those of the offer rejected.

Recording the deed at the county recorder's office

Acknowledgment by a notary public of the signature on a deed is done as a prerequisite for:

Performance

All of the following are essential elements of a contract, except:

Written documentation

All of the following are essential to creating a valid contract, except:

Under an exclusive agency listing, the seller may not be liable for a commission if they sell the property themselves.

All of the following statements are incorrect, except:

Applies only to things that have been properly disclosed or are visible and observable conditions.

An "as is" clause in a general purchase contract:

Rejection by the offeree

An offer is terminated by:

Tender

An offer which requires performance in accordance with contractual obligations is an example of:

It is exercised

An option becomes a binding contract on both parties when:

Prevents the seller from selling the property to another buyer for the term of the option period.

An option granted to a buyer:

Anita may revoke the offer and recover her deposit

Anita signs a real estate purchase contract as a buyer. The contract states the offer to purchase is valid for three days. One day later, Anita wishes to rescind her unaccepted offer. Which of these answers is correct?

Definite termination date

Any exclusive right to sell listing needs to contain a(n):

Fraud

Any intentional concealment of material facts by an agent is regarded as:

Disclose the existence of any outstanding offers received on the property to the seller, disclose all material information to the seller, and obtain written consent from the seller which acknowledges any profit or anticipated profit

Broker Greg took a listing on a commercial office complex and received an option to purchase the property within one month. On the 25th day of the listing, Broker Greg decides to buy the property. Before buying the property, Broker Greg is required to:

Is liable for payment of a commission to Matthews as well as to the selling broker

Broker Matthews took a 90-day exclusive agency listing to sell a property owned by Tyler. After 30 days without selling the property, Tyler sent Broker Matthews a letter cancelling the listing. One week later, Tyler enters into open listings with several other brokers. Two weeks later, one of the brokers sold the property. In this situation, Tyler:

Void

Broker Wallace represented a young man in the sale of his home. After purchase terms had been agreed to and the grant deed had been signed and delivered into escrow, the title company discovered the seller was not yet 18 years old and was not emancipated. The grant deed is:

A fee on any sale provision, a termination provision, or a safety clause

Brokerage fee provisions which may be included in a seller's exclusive right to sell listing agreement include:

The full amount to Saul

Brokers Phoebe and Saul both have an open listing on a property. Broker Phoebe showed the property to a prospective buyer, but the buyer decided not to buy. Two weeks later, Broker Saul contacted the same buyer and arranged a sale of the property. The seller is obligated to pay a commission as follows:

If the $365,000 VA-guaranteed loan is not obtainable, Buyer Martin may renegotiate the purchase contract on terms mutually agreeable to Buyer Martin and Seller William. If the Certificate of Reasonable Value (CRV) is less than $365,000, Buyer Martin is entitled to cancel the transaction. If the CRV on the property is $350,000, the buyer may complete the purchase by making an additional $15,000 down payment.

Buyer Martin agreed in writing to purchase Seller William's property for $365,000. The offer was conditioned on Buyer Martin being able to obtain a U.S. Department of Veterans Affairs (VA)-guaranteed loan for the purchase price secured by the subject property. Of the following, which best represents Buyer Martin's option under this purchase transaction?

Comp one, -$50,000; Comp two, -$100,000; Comp three, -$150,000

Consider an appraiser analyzing the site location of the subject property and three comparable properties. The first comparable property is superior to the subject. The second comparable is to superior to the first comparable but inferior to the third comparable. If the differential were valued at $50,000 for each level of difference, the adjustments will be:

Buyer's listing

For a buyer's broker to have the ability to negotiate their fee, the buyer's broker needs to enter into an employment agreement with their buyer, called a(n):

The death of Heather constitutes a revocation of the offer

Heather made an offer to purchase real property. The seller accepted the offer but Heather died before this acceptance was communicated to her by the seller's agent. Based on these facts, which of the following is true?

Accept the listing

If a 16-year-old emancipated minor wishes to sell real property, their broker may:

May be responsible for both rent and maintenance

If a lessee assigns their lease to someone else, the lessee:

Assignee

If a lessee transfers all of their interests in a property, the transferee who receives the lessee's interest is classified as a(n):

Choose not to cooperate in the marketing effort and risk liability for damages.

If a principal no longer wants to employ a broker to act on their behalf after entering into an exclusive right to sell listing, they may:

30-day notice of change in rental terms

If a residential landlord under a month-to-month rental agreement desires to increase rent less than 10%, the landlord serves a:

Illegal purpose

If present at the formation of a contract, which of the following does not make a contract voidable?

Trading down

In a §1031 exchange, a person is most likely to be taxed for a gain when:

Be signed by both the buyer and seller and be acknowledged before a notary public

In order to qualify for recording with the County Recorder, a land sales contract needs to:

Kickbacks or discounts on goods and supplies

It is unethical for a property manager's compensation to be structured as:

Offer and acceptance

Mutual consent is typically evidenced by:

Attach a tax statement to the listing

On an exclusive listing, a broker is not disciplined for failure to:

There is no contract

Seller Vega listed a vacant lot with Broker Wright for $120,000. Prospective buyer Marty submitted an offer at a purchase price of $100,000 with the offer to expire in 30 days. The next day, Seller Vega countered at $110,000. Buyer Marty rejected the counter. Three days later, Seller Vega delivered to Broker Wright a signed acceptance of Buyer Marty's initial $100,000 purchase offer. When Broker Wright told Buyer Marty of Seller Vega's acceptance, Marty stated he did not intend to buy the property. Based on the foregoing actions:

The seller's acceptance of the offer was properly communicated to the buyer

The effective date for a residential purchase agreement is the date:

International buyers

The following persons may not lawfully enter into a valid contract to purchase property, except:

Competency, mutual consent, lawful object, consideration

The four essential elements of an enforceable contract are:

Seller and buyer

The relationship between a vendor and vendee under a land sales contract is most similar to the relationship between a(n):

Vendee

The right of possession and equitable title is held by the:

Possession of the property

The sale of real estate under a conditional installment sale gives the buyer (vendee):

The grandchild is compelled to sell under the terms of the accepted offer.

The seller dies after an offer to purchase their property has been accepted. The seller's grandchild inherits the real estate. What happens to the sale?

A more valuable apartment building, assuming a larger loan and paying cash boot to balance the equities

To avoid a taxable gain, a property owner may exchange their commercial property with:

Does not always have to be in writing

To be enforceable, the listing of a business opportunity:

Vendor

Under a land sales contract for the sale of real property, legal title is held by the:

All

Under a land sales contract, title is conveyed to a buyer when they pay ___________ the remaining unpaid amount on the purchase price.

Rental payments, a termination date, or the right to exclude others from entry

Unlike a lease, a license does not include:

Files a quiet title action

Upon the default of a buyer under a land sales contract, the seller:

Rescind the contract

When a buyer purchases property without being informed it is on a septic system, the buyer may:

Signatures of both the owner and tenant

When a lease is for a period greater than one year, the contract does not require:

Novation

When an existing contract is replaced by an entirely new contract, it is an example of:

Voidable

When coercion or duress are applied to a party in a contract, the contract is:

Broker

When damages resulting from a breach of the contract are not adequate, each of the following may request specific performance, except the:

Defacing

When listing agents improperly delete or strike through terms or provisions in a signed purchase agreement, this act is known as:

Percentage lease

When rent is computed based on the gross sales of a business occupying the property, the lease is classified as a(n):

Ask questions to determine the seller's reason for listing

When taking a listing, it is appropriate for the broker to:

The vendor needs to hold monies in a trust account

When the vendee under a land sales contract makes payments which include an impound for taxes:

Enforceable

When two brokers make a verbal agreement to split a commission, the agreement is:

When the offeror revokes the offer after the offeree notified them of their acceptance

Which of the following does not terminate an offer to purchase real property?

180 days after the listing agreement is signed

Which of the following is an acceptable termination date for an enforceable exclusive listing of residential real property?

Quiet enjoyment

Which of the following is an example of an implied covenant under a lease?

The owner of the property died with a will

Which of the following is least likely to be true regarding a property that is transferred through intestate succession?

A deed obtained through undue influence or threat

Which of the following is not an example of a void deed?

The seller guarantees the buyer's performance of the loan

Which of the following is not true in a sale-leaseback transaction?

Whatever time period is agreed to by the seller and broker

Which of the following is the maximum term of an exclusive right to sell listing on real property?

The option to purchase will generally pass with an assignment of the lease

Which of the following is the most correct statement about an option to purchase contained in a lease agreement?

An option is valid so long as consideration is actually delivered

Which of the following is true concerning an option?

Only the optionor is bound to perform under the terms of an option

Which of the following is true concerning an option?

A contract which is to be performed greater than one year after it is entered into.

Which of the following needs to be in writing to be enforceable under the Statute of Frauds?

The option binds the optionee to performance

Which of the following statements regarding an option is false?

The entire amount of their money losses caused by the buyer's breach

Without a liquidated damages provision in the purchase agreement, the seller is entitled to recover:

Qualified endorsement

Writing "without recourse" on the back of a check creates a(n):