Chapter 7: Completing the Residential Purchase Agreement Purchase Flashcards
The sum of money, agreed to in advance and stated in the contract, that will be paid if a clause or condition in the contract is breached.
Liquidated contracts
The policy issued after the title insurance company conducts its title search.
Policy of title insurance
Takes precedence over all other preprinted instructions on a real estate document.
Written or typed word
This part of the form combines the buyer’s instructions and sends them to the escrow holder for purchase of 1 to 4 residential units.
Joint escrow instructions
Amount of time in which funds must be delivered as an initial escrow deposit.
Three business days after offer acceptance
Earnest money deposit–usually a check given with the offer.
Initial deposit
Party who agrees to pay for inspections and reports.
Allocation of termite costs
Buyer will take possession three days after the close of escrow.
CE + 3
If the residential property was constructed before 1978, the seller must provide the buyer with this notice.
Lead-based paint notice
Buyer’s or seller’s right to cancel the agreement if certain contingencies or time period requirements are not met.
Cancellation rights (Buyer and Seller)
A written proposal to purchase real property for a specified sum.
Offer
The written contract signed by both the buyer and seller of real property.
Purchase agreement (residential)
Requires seller to deliver these two mandated forms:
1) Transfer Disclosure Statement (TDS)
2) Natural Hazard Disclosure Statement (NHD)
Statutory disclosures
The legal means of documenting the type of ownership interest in real property.
Title and vesting
In this type of agreement, the seller helps to finance the purchase by giving the buyer a trust deed loan on the property.
Seller-financing addendum
In a typical residential real estate transaction, what types of questions must be addressed?
a) Financing
b) Possession
c) Condition of title
d) All of the above
d) All of the above
In California, who customarily conducts the title search, prepares preliminary reports, and issues policies of title insurance?
a) Title insurance company
b) Escrow company
c) Real estate agent
d) None of the above
a) Title insurance company
The California Residential Purchase Agreement and Joint Escrow Instructions is also commonly referred to as the:
a) purchase agreement.
b) purchase contract.
c) listing agreement.
d) both a and b.
d. both a and b.
When interpreting the completed purchase agreement contract:
a) the handwritten word takes precedence over the preprinted words.
b) the preprinted words take precedence over the written words.
c) a lawyer must fill in the written words to be legal.
d) none of the above.
a) the handwritten word takes precedence over the preprinted words.
When there are inconsistencies between general provisions and specific provisions:
a) the general provisions ordinarily qualify the meaning of the specific provisions.
b) the broker could lose his or her license.
c) specific provisions will be ignored.
d) the specific provisions ordinarily qualify the meaning of the general provisions.
d) the specific provisions ordinarily qualify the meaning of the general provisions.
When filling out the date at the top of the purchase agreement contract, it’s important to:
a) use digits, like 02/04/20.
b) use words and full dates, like February 2, 2020.
c) postdate the form to cover any oversights.
d) none of the above.
b) use words and full dates, like February 2, 2020.
The sum of money, agreed to in advance and stated in the purchase agreement contract, that will be paid for not fulfilling a clause or condition in the contract, is called:
a) solid damages.
b) soft damages.
c) liquidated damages.
d) none of the above.
c. liquidated damages.
If a buyer applies for an 80% loan and the appraisal does not come at or above the specified purchase price:
a) the buyer will still have to go through with the purchase.
b) the buyer “may” be released from obligation or renegotiate price.
c) the seller must get a new appraisal.
d) none of the above.
b) the buyer “may” be released from obligation or renegotiate price.
In the closing and occupancy section of the purchase agreement contract, the words “CE+3” mean:
a) the buyer will take possession 3 days after the close of escrow.
b) the seller will make a counter offer 3 days after the creation of escrow.
c) the buyer will take possession 2 days from closing of escrow.
d) none of the above.
a) the buyer will take possession 3 days after the close of escrow.
Which of the following is true concerning wood-destroying pest inspection?
a) Termite clearance is not mandated by law, its usually a lender’s requirement.
b) Who pays for the inspection is negotiable.
c) Section one refers to actual termite inspection, and section two refers to conditions that may allow for termite inspection.
d) All of the above.
d) All of the above.
