Real Estate Chapter 15

Eddie and Sue enter into a real estate contract. But because of an unlimited inspection period, the transaction does not close for five years. Sue files suit against Eddie to complete the transaction. But the state has a law that says contracts are enforceable for only 4 years. What is the result?

• The contract is terminated by operation of law, statute of limitations.

• Sue will prevail.

• Eddie will prevail.

• The real estate will be sold and the proceeds divided among the parties.

How are compensatory damages generally limited in contract cases?

• You cannot claim damages for emotional distress.

• Compensatory damages are not limited in contract cases.

• You cannot claim financial damages.

• You cannot claim liquidated damages.

What are liquidated damages meant to cover?

• Damages that cannot easily be calculated, like a lost sale.

• Damages that are easily calculated by invoice.

• Damages for emotional distress.

• Damages for personal injury.

During the term of the Installment Land Contract, who holds equitable title and who holds legal title to the property?

• The buyer takes equitable title and the seller holds legal title.

• The seller takes equitable title and the buyer holds legal title.

• The buyer takes both equitable and legal title.

• The seller takes both equitable and legal title.

What type of ownership interest does an option to purchase real estate give the option holder?

• An equitable interest.

• A legal interest.

• Options don't give holders any ownership interests.

• An unequitable interest.

Why might an investor want to enter into an option to purchase real estate?

• The investor thinks the market will go up, and they can lock in a lower price.

• The investor thinks the market will go down, and they can lock in a higher price.

• The investor thinks the market will go up, and they can lock in a high price.

• The investor definitely wants to purchase the property as quickly as possible.

In an option to purchase real estate, who is the "optionee," and who is the "optioner"?

• The optionee is the tenant, investor, or another party buying the right to purchase the real estate property. The optioner is the property owner, selling that right.

• The optionee is the property owner selling the right to purchase real estate property. The optionee is the property owner, selling that right.

• The property owner, tenant, investor, or other party can all be either the optionee or optioner, depending on who initiates the options contract.

• The optionee is the property owner, and the optioner is the listing agent.

Brad offers Seth $150,000 for his real estate. Seth writes back that he'll take $160,000. Have they formed a binding contract?

• No, there was no meeting of the minds.

• Yes, the price is set at $150,000.

• Yes, the price is set at $160,000.

• Yes, the price is set in the middle at $155,000.

What is the best practice for a licensee when a real estate transaction runs into problems?

• Advise the parties to seek an attorney and step away from the transaction.

• Pick a side and represent them in court.

• Provide the best legal advice available to both sides.

• Take the largest bribes to rule in the favor of one party.

According to the …………, all real estate sales contracts must be in writing.

• Statute of Frauds

• Statute of Limitations

• Federal Fair Housing Laws.

• All of the answer choices provided are correct.