Chapter 10 True/False

Question 1

Business days only exclude Sundays.

True
False

Answer 1

False: Business days exclude Saturdays, Sundays and legal holidays. For the definition of deadlines, review lines 435-437 of the WB-11 Residential Offer to Purchase.

Question 2

A court will construe a contract drafted by the buyer’s licensee more strictly against the buyer.

True
False

Answer 2

True: When a contract contains an ambiguous term, the court will interpret the contract more strictly against the drafter.

Question 3

A buyer may withdraw an offer prior to binding acceptance.

True
False

Answer 3

True: Review line 42 of the WB-11 Residential Offer to Purchase.

Question 4

The Vacant Land Offer to Purchase provides a right to cure with the inspection contingency.

True
False

Answer 4

True: The WB-13 Vacant Land Offer to Purchase includes a right to cure at lines 343-353.

Question 5

If an agent has knowledge of the terms of a pending offer on a property listed with the agent’s firm, the agent may not submit their own offer.

True
False

Answer 5

True: This rule is intended to prevent an agent in the company from taking unfair advantage of a buyer by drafting a personal offer with knowledge of the terms and conditions offered by a third party buyer/member of the public.

Question 6

A sidewalk special assessment was levied after the date after the offer. The buyer will pay this special assessment.

True
False

Answer 6

True: Review lines 416-425 of the WB-11 Residential Offer to Purchase. A seller is responsible for special assessments levied or for work actually commenced prior to the date of the offer. A buyer is responsible for all other special assessments. The division for responsibility for these costs depends on the date of the offer, not acceptance or binding acceptance.

Question 7

The seller will have the right to cure in the inspection contingency if the offer does not indicate a choice in the offer.

True
False

Answer 7

True: Line 216 of the WB-11 Residential Offer to Purchase acknowledges that if “no choice” is indicated as to the seller’s right to cure, then the seller has the right to cure.

Question 8

Licensees may withhold any offers from presentation pending the seller’s actions on previously presented offers.

True
False

Answer 8

False: A licensee must present all offers to the seller in an objective and unbiased manner, discussing the advantages and disadvantages of each offer, so the seller has all the material facts the seller needs to make a decision.

Question 9

All prorations are calculated as of the day of closing.

True
False

Answer 9

False: All prorations are calculated as of the day prior to closing. Review line 364 of the WB-11.

Question 10

Guaranteed sales are legal.

True
False

Answer 10

True: A guaranteed sale is a service offered by some brokers in which the firm agrees to pay the owner of a listed property a predetermined price if the property is not sold within the term of the listing contract.

Question 11

A contract for sale should include the parties’ full legal names.

True
False

Answer 11

True: Contracts must identify the parties to the contract.

Question 12

A listing licensee may disclose that there is an accepted offer with a home inspection contingency on a property.

True
False

Answer 12

False: Licensees can disclose that another party holds a right of first refusal on a property, that a seller has accepted an offer, or accepted an offer with contingencies. A licensee can also disclose that a seller has accepted an offer contingent on the closing of buyer’s property contingency (a “bump clause”), but the licensee cannot disclose the terms of the bump clause or any other contingency terms.

Question 13

A licensee is drafting a personal offer as a principal on a property. The licensee will strike all of the agency language on lines 1-2 of the WB-11 Residential Offer to Purchase.

True
False

Answer 13

True: A licensee drafting a personal offer is acting as a principal and not an agent. The licensee would strike the agency language on lines 1-2 of the offer.

Question 14

The purchase price of a property is $100,000. The property has been damaged in the amount of $6,000. The buyer has the right to cancel the contract.

True
False

Answer 14

True: Review lines 472-473 of the WB-11 Residential Offer to Purchase.

Question 15

A listing agent who has knowledge of a right of first refusal on the seller’s property must disclose the right of first refusal in writing to the buyer prior to delivering a copy of the buyer’s offer to the person holding the right of first refusal.

True
False

Answer 15

True: A right of first refusal is treated like a material adverse fact and must be disclosed in writing to all parties.

Question 16

The seller is free to choose from all accepted secondary offers when it is time to give a secondary buyer notice that their offer has become primary.

True
False

Answer 16

True: Sellers do not assign priority to secondary offers and can choose to elevate any accepted secondary offer.

Question 17

In the offer, the buyer agrees to give the seller $2,000 of earnest money four days after acceptance, and time is not of the essence. The buyer does not pay the seller the $2,000 earnest money four days after acceptance. The buyer is in breach of the contract.

True
False

Answer 17

False: In the buyer’s offer, time is not of the essence. The buyer must pay the earnest money within a reasonable time.

Question 18

A licensee may refuse to draft a buyer’s offer if the licensee truly believes the seller will not accept the buyer’s offer.

True
False

Answer 18

False: A licensee may not refuse to draft or submit an offer unless the terms of the offer would be contrary to that seller’s instructions. If a seller told the listing agent that the seller will not consider offers below a specific amount, the licensee does not have to present offers below that amount.

Question 19

Earnest money is required in a residential real estate transaction.

True
False

Answer 19

False: Earnest money is not required in any real estate transaction.