Chapter 6 Flashcards
A provision in a contract stating the purchase depends on the buyer qualifying for a loan is called a:
“subject to” provision or contingency clause.
Buyer makes a written bonafide offer to purchase, and seller signs the acceptance. A contract is first created:
when buyer receives proper communication of seller’s acceptance
The law that sets the time period in which a legal action must be filed by the wronged party, is called the statute of:
limitations
When an existing contract is replaced with an entirely new contract, it is called:
novation
All of the following are essential for a valid real estate contract, except:
parole evidence
An executory contract is a contract that:
is yet to be completed
Which of the following is a classification of a contract? Valid Voidable Unenforceable All answers are correct
All answers are correct
An assignment:
transfers a person’s right in a contract.
According to the CAR Deposit Receipt in the textbook, the:
buyer’s signature constitutes an offer to purchase
When the owner of a piece of leased property gives the lessee an option to buy, the option:
is not a purchase contract until exercised
When a buyer wishes the property instead of money damages, the buyer will sue for:
specific performance
A buyer makes an offer on a lot for $105,000 and the seller counter offers for $108,000, the buyer is:
relieved from any further liability
If the property in question is intended to be the home of the buyer, the CAR deposit receipt liquidated damage clause limits the buyer’s liability upon default. The maximum liability for the buyer is the amount of the deposit or what percentage of the sales price whichever is the lesser?
3%
Which of the following is FALSE concerning purchase agreement contracts?
Promissory notes and post-dated checks are never acceptable as consideration.
Which of the following is NOT considered a basic element of any contract?
Enforcement
Consideration can best be described as:
anything of value
According to the CAR deposit receipt in your textbook, if a buyer and seller get together and cancel a sale after the broker had secured an offer and acceptance, and the seller instructs the broker to return the buyer’s full deposit, the broker may:
ask the seller for the commission, but return the full deposit
A broker’s commission is most likely earned when the broker:
communicates acceptance to the offeror
Broker Wilson took a listing. Wilson’s salesperson brought in an offer. One hour later another offer on the same property came in from a different real estate company. The salesperson from Broker Wilson’s office submitted the first offer first. Which of the following is correct?
Broker Wilson must inform the seller of both offers or be subject to disciplinary action
If one of the parties doesn’t go through with a contract (nonperformance), it is called a(n):
breach
Which of the following indicates the greatest progress toward completion of a sale?
broker notified buyer of seller’s signed acceptance of buyers offer
Which of the following is used to change the original terms of the purchase agreement?
Counter offer form
While a transaction is in escrow, a property suffers $10,000 in fire damage. Per the CAR purchase contract and receipt for deposit:
the buyer is entitled to the return of the entire deposit
Six separate co-buyers of a parcel of land signed a deposit receipt contract at different times and places. A copy must be:
given to each at the time they sign
A signed written contract takes precedence over oral agreements or prior written agreements based on:
the parol evidence rule.
When a buyer backs out of a home sale, the most common outcome is:
buyers get back the deposit, seller hopes to find another buyer
What is a contract called where the seller agrees to pay a commission and the broker agrees to use diligence in finding a buyer?
bilateral executory contract
At what minimum age is a civilian single person, who has not had any court or guardianship intervention, legally capable of entering into an enforceable real estate contract?
18 years
The listing agreement stated that the existing loan was to be assumed. The broker received an offer per the exact terms of the listing except that the buyer wanted to put on a new loan. The seller refused the offer. The broker would be:
entitled to no commission
Under an option agreement, the grantor/owner of the property is the:
optionor
