4.2 Purchase Contracts

The seller of a property that has been listed for many months is out of town for an extended period of time, and a full price offer is made by a buyer. The listing broker:

• may accept the offer because the agent is the seller's attorney-in-fact

• may not accept the offer

• may accept the offer because it is a full price offer

• may accept the offer based on the broker's fiduciary duties

If a verbal offer is made on a property and 2 hours later a different written offer is made, the listing agent must:

• submit both offers

• present only the written offer

• present whichever one is higher

• present only the verbal offer

When a purchase offer indicates that a nominee may be the person closing the purchase:

• the seller does not have the right to approve the nominee

• the buyer must disclose the nominee within 10 days of seller's acceptance

• the seller may require disclosure of the nominee to determine the nominee's ability to close on the purchase

• the named buyer will forfeit earnest money if financing is not available

Who has the primary responsibility for presenting an offer:

• listing broker

• selling broker

• salesperson

• buyer's broker

Answer explanation

presenting all offers to their seller client

The amount of the earnest money is determined by the:

• buyer

• seller

• buyer and seller

• broker

Earnest money is normally held:

• by the listing agent's broker

• by the buyer's agent's broker

• only in a broker's trust account

• by the seller

Between the time the purchase contract is signed by the buyer and seller and title changes hands, the contract is:

• executory

• executed

• voidable

• unenforceable

Answer explanation

not all terms of the contract have yet been fulfilled

P mails an offer to J on March 4 to purchase J's property. The offer states that J has until no later than March 10 to notify P of acceptance. J accepts the offer immediately and mails it back to P, but due to postal strike, P does not receive the acceptance by March 10. At this point:

• J can appeal to the Real Estate Department

• there is no contract

• the broker can mediate

• there is a valid contract

Answer explanation

seller put the acceptance in the mail before deadline

S makes an offer to purchase a home listed by a broker, but the seller is not available until Wednesday. On Tuesday S wishes to withdraw the offer. Which of the following statements is CORRECT:

• S cannot do this as S has signed the contract

• S must forfeit the earnest money

• the broker must return the deposit and offer

• the broker should tell S the offer has been accepted

When a buyer's interest in a purchase contract is assigned to a third party, the seller's permission:

• is always required

• is never required

• must be obtained at the time of listing the property

• may be required