ch8 Flashcards
A unilateral agreement that establishes an agency relationship with a homeowner to market and procure a buyer for a property is known as:
a listing agreement.
The listing agreement is the employment contract between a broker and a property owner whereby the broker is hired as an agent to find a ready, willing, and able buyer for the purchase of the subject property on terms listed in the agreement or otherwise acceptable to the seller. A listing agreement is a unilateral personal services contract
An agreement wherein an owner of property establishes an agency relationship with one real estate brokerage and retains the right to sell the property without the payment of any commission is known as:
an exclusive agency listing.
The exclusive agency listing gives one real estate brokerage the right to sell the property, but no commission is due if the seller sells the property.
A verbal agreement to pay a commission if a buyer is found for the property is known as:
an invalid listing.
The statute of frauds requires all listing agreements to be in writing. A verbal listing agreement would be an invalid listing.
An agreement that binds the seller to pay a commission regardless of who sells the property is known as:
an exclusive right to sell listing.
Under the exclusive right to sell listing, the seller employs one broker. That broker is entitled to a commission regardless of how the listing is sold or by whom.
To be the procuring cause, a real estate agent must:
be the individual primarily responsible for bringing a ready, willing, and able buyer who enters into a sale agreement with the seller.
The procurring cause agent is the agent primarily responsible for bringing a ready, willing, and able buyer who enters into a sale agreement with the seller.
The clause in a listing agreement that protects the listing agent from buyers and sellers entering into an agreement after the expiration of a listing to avoid commission liability is found in the:
Exclusive Right to Sell Listing Agreement.
The money deposited at the time of an offer to purchase that represents liquidated damages to the seller in the event of buyer breach is known as:
earnest money.
A provision in the purchase agreement that stipulates the contract will not be binding unless the buyer can obtain a 30-year fixed conventional loan with an interest rate not to exceed 7% is known as:
a contingency.
Any term in a contract that sets forth a condition that must be met before the duty to perform ripens is known as a contingency.
Which type of contract does NOT have to be in writing to be valid?
A lease with a term of less than one year
A lease that is created to include certain expenses, in addition to a stipulated monthly rate, is known as a:
net lease.
With a net lease, the tenant pays a set amount of rent and some or all of the expenses of operating the building. These expenses are insurance, property taxes, and selected operating expenses. Typically, net leases are used to shift the burden of escalating operating costs onto the lessee.
Under a land sale contract, the vendor:
retains naked title to the property until the contract is paid in full by the vendee.
The vendor (seller) in a land contract (seller-financed transaction) releases most of the bundle of sticks to the buyer (vendee) but retains what is known as naked title until the buyer has paid the seller the full contract price
Which of the following can terminate a real estate contract with no duty of further performance?
A contingency that is not satisfied.
When an event occurs creating the impossibility for further performance under the contract.
If either of the parties declares bankruptcy prior to closing.
John has entered into a lease that provides annual rent increases of $500 each year. John’s lease agreement is known as:
a graduated lease.
A lease that pre determines rent increases is a graduated lease.
Which of the following must be included in a receipt for deposit?
The total purchase price.
The amount of the earnest money deposited.
The form of payment.
Harry has just purchased a duplex that has one of the units leased for seven months to Mary. Harry’s purpose for purchasing the duplex is so that his family can occupy one unit and his brother, Kyle, can rent the other. Upon closing, Mary:
has the legal right to occupy the unit for the balance of her lease.
