CH 10 - Sales Contracts and Practices

an agent proposes a pre-printed sales contract form for use by the Buyer and Seller. The North Carolina real estate commission prohibits the inclusion of which of the following in this contract form?

• Loan contingency

• Indefinite termination

• Broker compensation

• Liquidated damages

according to the NCAR/NC be a Standard Offer to Purchase and Contract Form 2-T, if the Seller is determined to be in breach of contract the day before the scheduled closing, which of the following is the Seller liable to return the Buyer?

• Due diligence fee, earnest money deposit, and reasonable expenses of purchase

• Due diligence fee and earnest money deposit only

• Earnest money deposit and expenses of purchase

• Earnest money deposit only

A Buyer has contracted for the purchase of the Sellers home by utilizing the NCAR/NC be a Standard Offer to Purchase Form 2-T.

Two days after the due diligence date, the Buyer informed the Seller that the lender has rejected his mortgage application and he will be unable to purchase the home.

The Buyer is entitled to a refund of what?

• Earnest money deposit only

• Due diligence fee only

• Both earnest money deposit and due diligence fee

• None of these

the Buyer has contracted for the purchase of the Sellers home by utilizing the NCAR/NC be a Standard Offer to Purchase and Contract Form 2-T. Five days after the scheduled closing date the Buyer informed the Seller he will be unable to complete the purchase of the home. The Seller is entitled to retain what?

• Earnest money deposit, due diligence fee, and reasonable attorney fees

• Earnest money deposit and due diligence fee

• Specific performance of the sale

• Earnest money deposit, due diligence fee, and all reasonable expenses related to the purchase

A purchaser has submitted an offer to purchase that states the offer “shall remain open and in effect until 5 PM on Thursday, October 30".

The offer further states the purchaser "... agrees NOT to withdraw the offer prior to that time."

Late on Wednesday, October 29, the Buyer informed the Seller of his intent to withdraw the offer. This offer is what?

• Irrevocable until 5 PM on October 30

• Revocable until such time as it becomes a contract regardless of what the offer states

• Irrevocable once the Seller or his agent actually receives the signed offer

• Revocable until the Seller or his agent actually receives the offer and even then NOT until 5 PM on October 30

under the installment sales contract (contract for deed) what interest best describes the Buyers rights in the property?

• constructive title

• fee simple interest

• equitable title

• legal title

the effective date is considered to be the date in which what?

• The Buyer and the Seller both have signed the offer to purchase

• The purchaser has completed due diligence and decides to finalize the purchase

• The offeree has communicated notice of written acceptance to the offeror

• The parties convey legal title to the property

A Buyer submits a written offer to purchase to the Seller, who signs his acceptance without revision. The Seller males this agreement back to the Buyer at his property address.

After it is mailed but before the Buyer receives it, the Seller faxes a notice to the Buyer of his intent to revoke his signed agreement. Which of the following is correct?

• This became a contract as soon as the Seller signed the agreement, so the Seller cannot revoke it

• This became a binding contract when the Seller mailed the signed acceptance to the Buyer, so the Seller cannot revoke it

• The Seller can terminate this agreement since he communicated his intent to withdraw prior to the Buyer receiving his signed document

• The Seller can terminate this agreement since the Buyer has not communicated his notice of acceptance of the Sellers acceptance of his offer

In regards to a contingent sale ad addendum, which of the following is true?

I: The contract of the sale is automatically terminated if the Buyers house is NOT under contract by his due diligence date with his Seller

II: The Buyer is entitled to a refund of his earnest money deposit if you terminate the contract no later than three days after the scheduled closing date if the Buyer is unable to close

• I ONLY

• II ONLY

• BOTH I AND II

• NEITHER I NOR II

a Buyer is informed by his lender five days after the due diligence date that his loan is NOT approved. Which of the following is true of this statement: “the Buyer can back out of the agreement...

• ...and get a refund of his earnest money deposit.”

• ...and get a refund of his due diligence fee and his earnest money deposit.”

• ...but will not be entitled to a refund of this earnest money deposit.”

• ... and obtain a refund of his due diligence fee but not his earnest money deposit since his loan contingency has not been met.”