N5 Purchase Contracts

Question 1

The Three purposes of a Purchase Agreement.

a.
b.
c.

Answer 1

a. Copy of the offeror’s offer
b. Legally binding contract upon acceptance
c. Escrow instructions

Question 2

An invitation to enter a contract.

Answer 2

Offer

Question 3

The parties to an offer are:
1.
2.

Answer 3

1. Offeror

2. Offeree

Question 4

When may the offeror withdraw the offer?

Answer 4

Anytime

Question 5

__________ offers must be submitted to an offeree.

Answer 5

All

Question 6

When licensees purchases or sells a property for themselves they must disclose their_____.

Answer 6

Licensed Status “Owner Agent”

Question 7

An offer made by an offeree in response to the offer.

Answer 7

Counter Offer

Question 8

Any change to any offer is considered to be a ___.

Answer 8

Counter Offer

Question 9

When any change is made to an offer the original offer is:

Answer 9

Null & Void

Question 10

Binding Contract

Answer 10

The acceptance of an offer and communication of that acceptance to the offer.

Question 11

Once a purchase agreement becomes binding, the buyer is said to have:

Answer 11

Equitable Title

Question 12

If a buyer or seller dies, an executory purchase agreement is said to be binding on the_____.

Answer 12

Heirs or Estate

Question 13

Money given by the offeror to show good faith.

Answer 13

Earnest Money

Question 14

Earnest money is usually held by the _____ broker.

Answer 14

Buyer’s

Question 15

The amount of earnest money is:

Answer 15

Negotiable

Question 16

In an Arizona Purchase agreement, the form of earnest money _____________.

Answer 16

must be stated in the agreement

Question 17

In Arizona, a sales person must turn over earnest money to the broker ______.

Answer 17

immediately/promptly

Question 18

In Arizona, unless otherwise agreed to __ _____ the broker must ______place earnest money in a _____ or __ _____.

Answer 18

in writing, immediately, trust, in escrow.

Question 19

Comingling

Answer 19

Mixing Client’s funds with broker’s business funds.

Question 20

The use of a client’s funds for the agent’s own use is:

Answer 20

Conversion

Question 21

Any provision dictating that a contract is dependent on the happening of a certain event.

Answer 21

Contingency.

Question 22

Mortgage Contingency

Answer 22

Any provision dictating that a contract is dependent on the obtaining financing.

Question 23

The evidence of termite damage could be ____ or ____.

Answer 23

rotted wood or cellulose debris

Question 24

Escrow

Answer 24

A neutral third party hired to close a transaction.

Question 25

When there is conflict between any pre-printed wording and wording written into the contract, the _____ ______ prevails.

Answer 25

Written Word

Question 26

An apportionment of funds between the parties for unpaid or pre-paid items such as taxes, insurance or interest.

Answer 26

Proration

Question 27

The phrase that specifies the importance of completing terms of a contract on a timely basis.

Answer 27

“Time is of the Essence”

Question 28

The evidence to a buyer that title is clear.

Answer 28

Title Insurance Policy

Question 29

An amount that was pre-determined by the parties to be the total amount of compensation an injured party will receive if the other party breaches the contract is known as _______.

Answer 29

Liquidated Damages

Question 30

Specific Performance

Answer 30

A court order given to enforce the provisions of a contract.

Question 31

The risk of loss to a property prior to closing is born by the _____.

Answer 31

Seller

Question 32

Caveat Emptor

Answer 32

Latin for Buyer Beware

Question 33

An overstatement of personal opinion.

Answer 33

Puffing

Question 34

A false statement of a material fact, which a party relies on to the party’s damage

Answer 34

Misrepresentation AKA Negligent Misrepresentation

Question 35

Fraudulent Misrepresentation

Answer 35

When misrepresentation is intentional.

Question 36

Real Estate Mal Practice Insurance

Answer 36

Errors & Omissions Insurance

Question 37

The legal remedy of canceling a contract and returning the parties to their original positions prior to entering into the contract is _____.

Answer 37

Rescission

Question 38

Indemnification Clause or Hold Harmless Clause

Answer 38

A contract provision in which one party agrees to protect another from damages or lawsuits.