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WorksheetsCH 10 - Sales Contracts and Practices
Total questions: 31
Worksheet time: 1hrs 2mins
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.”
which of the following is correct concerning an installment land contract?
The Buyer receives legal title at closing
The Seller retains equitable title at closing
The Buyer conveys equitable title at closing
The Buyer receives equitable title at closing
an option contract does what?
Requires the Buyer to buy if the Seller decides to sell
States that if the Seller decides to sell, the Buyer will have the first right to purchase
Requires the Buyer to buy and the Seller to sell
Requires the Seller to sell if the Buyer decides to buy
According to the standard offer to purchase and contract, when is “closing”?
At the attorney’s office when documents are signed
At delivery of the deed
And distribution of the sale proceeds
When the deed is recorded
which of the following will NOT typically terminate an offer?
acceptance
counter offer
death of offeror
performance
which of the following is NOT allowed means of payment for an additional earnest money deposit as indicated in paragraph 1D of the NCAR/NCBA offer to purchase and contract form 2-T?
cash
personal check
wire transfer
official bank check
A North Carolina provisional broker obtained an offer for a property listed with his firm along with a check for earnest money. The provisional broker should:
give the earnest money check to the sellers within three banking days of their acceptance of the offer
hold the check until the settlement meeting
deposit the check into his trust account within three days of acceptance
immediately turn the check over to his broker-in-charge
A prospective buyer makes a written purchase offer through a buyer's agent at ABC Realty. The seller accepts the offer as written. The seller communicates to a listing agent at XYZ Realty that the offer was signed. At this point in time, the:
seller is contractually bound
buyer is contractually bound
both parties are contractually bound
buyer can still withdraw the offer
On Monday, the seller receives a written offer on his vacant lot for $52,000. On Tuesday, the seller counteroffers to sell for $54,500. On Friday, the seller withdraws the counteroffer and accepts the original offer of $52,000. Under these circumstances:
there is a valid agreement because the seller accepted the buyer's offer exactly as it was originally made
there is no valid agreement because the seller's counteroffer was a rejection of the buyer's original offer
there is no valid agreement because the seller accepted the offer before the buyer withdrew the original offer
there is no valid agreement because the buyer's original offer was not accepted within 72 hours
A broker has an exclusive right to sell listing on a building. An offer to purchase the building is received while the owner is out of town. The offer requires a commitment from the seller before the seller is scheduled to return to the city. Under these circumstances, the:
broker may create a binding agreement on behalf of the seller
broker may collect a commission even if the transaction falls through because of the seller's absence from the city
buyer is obligated to keep the offer open until the seller returns
broker must obtain the signature of the seller to effect a contract
A real estate Offer to Purchase and Contract becomes valid when:
the written offer has been signed by both the offeror and offeree
communication of acceptance is given to the offeror or the offeror's agent
communication of acceptance is given to the offeree or the offeree's agent
earnest money has been deposited into the escrow agent's trust account
The listing agent received a full price offer that she faxed to the out-of-town seller. The seller signed the faxed copy, and faxed the signed copy back to the listing agent. The agent faxed the signed offer to the buyer's agent. Has a contract been formed?
No, because there is not one copy that has ink signatures of both parties.
No, because the buyer has not been notified of the acceptance yet.
Yes, because the Uniform Electronic Transaction Act states that faxed signatures are as binding as ink signatures.
Yes, because faxed signatures are binding for 48 hours until ink signatures can be obtained.
When an option exists, the optionor is bound, but the optionee has no obligation to purchase the property. For this reason options are considered ___ contracts where only one party is bound.
bilateral
unilateral
binding
valad
The optionee in an option to purchase real estate:
has no obligation to purchase the property
must purchase the property at any time within the option period
must be willing to renegotiate contract terms during the option period
is the prospective seller of the property
During the due diligence period in the North Carolina standard offer to purchase and contract, the buyer who was attempting to obtain a conventional loan did not receive final loan approval, but chose not to terminate the contract based on favorable communications from the lender. A week before closing, the buyer's loan application is denied. If the buyer terminates the contract at this point, the buyer:
will forfeit the earnest money deposit and due diligence fee because it would be a buyer breach
will receive a refund of the earnest money, since the termination was related to financing
can be sued by the seller for specific performance
will receive a refund of the earnest money and the due diligence fee
Carl and Hannah enter into a real estate sales contract. Under the contract terms, Carl will pay Hannah $500 a month for 10 years. Hannah will continue to hold the legal title to the property. Carl will live on the property and pay all real estate taxes, insurance premiums and regular upkeep costs. What kind of contract do Carl and Hannah have?
option to purchase contract
contract for mortgage
unilateral contract
installment land contract
Under an installment land contract, which title does the buyer hold during the repayment period? l. Legal title ll. Equitable title
l only
ll only
Both l and ll
Neither l nor ll
Under North Carolina licensing law, a licensee may disclose the content of multiple offers on the property:
only with the consent of the seller
only with the consent of the buyers who have made the offers and the agreement of their seller
a broker may never disclose the content of multiple offers
only if the broker determines that disclosure would be in the best interest of his client
All of the following are contained in the standard NCBA/NCAR Offer to Purchase & Contract Form 2T, EXCEPT:
A confirmation of agency status of the licensees
A disclaimer of liability for actions of the brokerage
Buyer representations and warranties
Possible delays in settlement date
Janice wrote a full price offer on a property and her buyer's representative submitted the offer to the seller. The next day Janice changed her mind and wanted to withdraw her offer. Which of the following is correct?
Janice cannot withdraw an offer that has already been submitted to the seller
Janice may withdraw her offer, but she will forfeit her due diligence fee
Janice is entitled to withdraw her offer at any time prior to acceptance and will receive a refund of both her due diligence fee and her earnest money
Janice can only withdraw her offer after she has given the seller notice of her intentions and provides the seller a reasonable time to act
Harold, a real estate licensee took a listing on a property. Later one of Harold's buyers wanted to make an offer on the property. Harold obtained the proper dual agency disclosure and consent from the buyer and seller.
Harold emailed the offer to the seller who signed and initialed it without any changes and returned the accepted offer to Harold. Is there a binding contract in this situation?
No, there cannot be a binding contract until the acceptance is communicated to the buyer
No, because Harold does yet have the contract with the original signatures on it
Yes, because once a seller signs and initials the offer is becomes a contract
Yes, because Harold is a dual agent and communication of the acceptance to the agent is the same as communication to the buyer client
When should parties to a purchase contract in NC utilize the NCBA/NCAR Contingent Sale Addendum?
When there are multiple offers pending in a short sale transaction
When the buyer wants to make multiple offers on several properties at the same time
When the buyer conditions their offer upon the sale of another property that they currently own
When the seller is also purchasing a property and needs that property to close before they can sell and transfer a current property to a buyer
