Closings 1

Question 1

What is Specific performance?

Answer 1

Suing if the buyer or seller doesn’t perform under specific terms of the contract. (Typically buyer suing seller.)

Question 2

What does a seller need to provide and disclose if their residential building permit was issued before 1978?

Answer 2

They must disclose any known lead based paint hazard. They must provide a lead based paint warning the broker must make sure the lead based paint accompanies any offer

Question 3

What is a Mill levy?

Answer 3

The taxable value of a property
$300,000 house Tax rate= 30 mills
equation 300,000 x 30 = 9,000,000 / 1000 = 9000

Question 4

In the contract to buy and sell, who pays the appraisal fee?

Answer 4

The cost of the appraisal fee is negotiated between the buyer and seller.

Question 5

According to the residential contract to buy and sell real estate, what can a buyer who is dissatisfied with inspection results do?

Answer 5

Terminate the contract with written notice immediately

Question 6

What is the purpose of the listing licensee providing information on square footage on listing?

Answer 6

For marketing purposes only! (Test Question)

Question 7

When can a buyer withdraw an offer to a seller?

Answer 7

Prior to the listing broker delivering it to the sellers.

Once a seller has accepted and signed the contract the buyers may no longer withdraw.

Question 8

If a seller makes a counter offer to the buyer, what happens to the buyers original offer?

Answer 8

If a seller counters the buyers offer, the original offer is considered rejected and the buyer is not held liable to that original contract.

Question 9

What would a buyer order to see if there is an encroachment on the property?

Answer 9

ILC Improvement Location Certificate or a survey

Question 10

If a lead based paint disclosure form is not attached to a sales contract in which a building permit for a residential dwelling was issued prior to jan 1 1978 the contract is?
Void? Voidable? Or lacking and may be amended or extended?

Answer 10

Void.

Question 11

A buyers earnest money is held by?

Answer 11

Whoever is named in the contract to hold it.

Question 12

Of the following which may NOT be used as earnest money? Cash? Check? A note? Deed of trust?

Answer 12

Deed of Trust.

Question 13

Is earnest money required with a contract in Colorado?

Answer 13

NO

Question 14

What happens if the seller refuses to fill out the sellers property disclosure?

Answer 14

The buyer may insist. The seller still must disclose any known property defects. if not the buyer can get out of the deal.

Question 15

In the contract do you have to disclose the source of water and supply?

Answer 15

YES. The ONLY time this info needs to be disclosed.

Question 16

What does the earnest money holder do if there is a controversy over the earnest money?

Answer 16

1. Wait for any proceedings between buyer and seller
2. Interplead all parties and deposit earnest money into a court of competent jurisdiction
3. Provide notice to the buyer and seller that unless earnest money holder receives a copy of the summons and complaint or claim within 120 days, the earnest money will be returned to the buyer.

Question 17

In order to extend the deadline for loan objection a broker must get permission from? The lender? The buyer? The seller?

Answer 17

The Seller

Question 18

What does the contract to buy and sell specify about the seller’s disclosure form?

Answer 18

That the seller will PROVIDE it.

Look for the word PROVIDE

Question 19

Why does the buyers broker sign the contract to buy and sell?

Answer 19

As a receipt for earnest money.

Question 20

What happens if inspection deadlines are missed?

Answer 20

The Contract terminates. There’s an inspection deadline, termination deadline (Buyer can back out) and object/resolution ( this allows the buyer and seller to either come to an agreement or cancel the contract)

Question 21

What is the main purpose of the final walk-through inspection before closing?

Answer 21

To verify that the condition of the property meets the requirements of the contract.

Question 22

Are “Addendums to the contract” required in real estate contracts?

Answer 22

No addenda to the contracts are not required unless certain individual situations arise.

Question 23

What is a Short sale addenda?

Answer 23

Any sale of real estate that equals less than what is owed. It’s the alternative to foreclosure.

Question 24

What is a Buy out addendum?

Answer 24

(A question related to this will be on the test.) When a licensee uses a commission approved addendum to buy one of their own LISTED PROPERTIES.

Question 25

A post occupancy agreement addendum is valid for how many days?

Answer 25

Up to 60 days. After 60 a properly drafted lease is recommended.

Question 26

What is Colorado foreclosure protection act?

Answer 26

This act gives the seller the right to cancel their contract. It was made so the sale and foreclosure of a home is done in a fair manner.

Question 27

Your buyer signs an objection inspection notice and you (The licensee) deliver it to the listing broker’s office via fax, has the seller received the objection?

Answer 27

Yes. As soon as listing broker receives the objection, it is deemed to have been delivered to the seller.

Question 28

What happens if the sellers remain in the home past the agreed upon possession date and time?

Answer 28

The buyers may evict the sellers and receive a daily charge as specified in the contract until they vacate.

Question 29

If a residential dwelling build before 1978 has lead based paint damage, who is most at risk?

Answer 29

Young children.