CH10: NC Real Estate Exam Practice Questions | Sales Contracts Flashcards
Under the installment sales contract, what interest best describes the buyer’s right to the property?
a. constructive title
b. fee simple title
c. equitable title
d. legal title
c. equitable title
According to the Standard OFfer to purchase and Contract form, 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 to the buyer?
a. due diligence fee, earnest money, deposit, and reasonable expenses of purchase
b. due diligence fee and earnest money deposit only
c. earnest money deposit and expense of purchase
d. earnest money deposit only
a. due diligence fee, earnest money, deposit, and reasonable expenses of purchase
A buyer is informed by his lender 5 days after the due diligence date that his loan is not approved. Which of the following is true? The buyer can back out of the agreement:
a. and get a refund of his earnest money deposit
b. and get a refund of his due diligence and earnest money
c. but will not be entitled to a refund of earnest money
d. and obtain a refund of his due diligence fee but not his earnest money deposit since his loan contingency has not been met
c. but will not be entitled to a refund of earnest money
The effective date is considered to be in the date in which:
a. the buyer and seller have both signed the offer to purchase
b. the purchaser has completed due diligence and decides to finalize the purchase
c. the offeree has communicated notice of written acceptance to the offeror
d. the parties convey legal title to the property
c. the offeree has communicated notice of written acceptance to the offeror
Which of the following is correct in regards to the standard offer to purchase form?
a. the scheduled closing date in the contract is the time of the essence
b. proposed assessments are to be paid for by the seller if confirmed after the closing
c. in the event of buyer breach of contract the seller is limited to the buyer’s EMD as liquidated damages
d. the contract provides a period of 13 days from the scheduled closing date for the delaying party to be able to close without being considered a breach.
c. in the event of buyer breach of contract the seller is limited to the buyer’s EMD as liquidated damages
Which of the following is NOT an allowed means of payment for an (additional) earnest money deposit as indicated in paragraph 1d of the Offer to Purchase and Contract Form?
a. cash
b. personal check
c. wire transfer
d. official bank check
b. personal check
According to the Standard offer to purchase contract when is closing?
a. at the attorney’s office when documents are signed
b. at delivery of deeds
c. at the distribution of the sale proceeds
d. when the deed is registered
d. when the deed is registered
The buyer has contracted for the purchase of the seller’s home by utilizing the Standard Offer to Purchase form. Two days after the due diligence date, the buyer informs 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:
a. earnest money deposit only
b. due diligence fee only
c. both earnest money and due diligence
d. neither earnest money or due diligence
d. neither earnest money or due diligence
An agent proposes a preprinted 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:
a. loan contingency
b. indefinite termination
c. broker compensation
d. liquidated damages
c. broker compensation
Which of the following will NOT typically terminate an offer?
a. acceptance
b. counteroffer
c. death of offeror
d. performance
d. performance
Which of the following is correct concerning an installment of a land contract?
a. the buyer receives legal title at closing
b. the seller retains equitable title at closing
c. the buyer conveys equitable title at closing
d. the buyer receives equitable title at closing
d. the buyer receives equitable title at closing
An option contract:
a. requires the buyer to buy if the seller decides to sell
b. states that if the seller decides to sell, the buyer will have the first right to purchase
c. requires the buyer to buy and the seller to sell
d. requires the seller to sell if the buyer decides to buy
d. requires the seller to sell if the buyer decides to buy
