Real Estate Quiz 2

All of the following are valid reasons for terminating a buyer representation agreement EXCEPT

• purchase of a property.

• death of the sales associate who worked with the buyer.

• agreement of the parties.

• death of the broker.

A buyer and a seller agree on a purchase price of $300,000 for a house. The contract contains a clause stating "Time is of the essence." Which statement is TRUE?

• The closing must take place within a reasonable period before the stated date.

• A "time is of the essence" clause is not binding on either party.

• The closing date must be stated as a particular calendar date, and not simply as a formula, such as "two weeks after loan approval."

• If the closing date passes and no closing takes place, the contract may be rescinded by the party who was ready to settle on the scheduled date.

A buyer signs a contract under which he is given the right to purchase a property for $130,000 anytime in the next six months. The buyer pays the current owner $500 at the time the contract is signed. Which of the following BEST describes this agreement?

• Contingency

• Option

• Installment

• Sales

An option to purchase binds which of the following parties?

• Buyer only

• Seller only

• Both buyer and seller

• Neither buyer nor seller

A buyer and a seller enter into a real estate sales contract. Under the contract's terms, the buyer will pay the seller $500 a month for 10 years. The seller will continue to hold legal title, while the buyer will live in the home and pay all real estate taxes, insurance premiums, and regular upkeep costs. What kind of contract have they entered into?

• Option contract

• Contract for mortgage

• Unilateral contract

• Land sales contract

The purchaser of real estate under an installment contract

• generally pays no interest charge.

• receives title immediately.

• is not required to pay property taxes for the duration of the contract.

• has only an equitable interest in the property's title.

Under the statute of frauds, all contracts for the sale of real estate must be

• originated by a real estate professional.

• on preprinted forms.

• in writing to be enforceable.

• accompanied by earnest money deposits.

Upon the receipt of an offer to purchase a property, the seller makes a counteroffer, the prospective buyer is

• bound by the original offer.

• not able to counter the counteroffer.

• bound by whichever offer is lower.

• relieved of the original offer.

A buyer makes an offer to purchase certain property listed with a real estate professional and leaves an escrow deposit with the real estate professional to show good faith. The real estate professional should

• immediately apply the deposit to the listing expenses.

• put the deposit in an account, as provided by state law.

• give the deposit to the seller when the offer is presented.

• put the deposit in the real estate professional's personal checking account.

While suffering from a mental illness that caused delusions, hallucinations, and loss of memory, a person signed a contract to purchase real estate. Which statement regarding the contract to purchase is TRUE?

• The contract is voidable.

• The contract is void.

• The contract lacks consent.

• The contract is fully valid and enforceable.