Practice Quizzes 3

Question 1

The use of a _______________ requires a written carryback disclosure form on one-tofour unit residential property when the seller will partially finance the sale.

Answer 1

land sales contract.
lease-option.
an unexecuted purchase agreement with interim occupancy

Question 2

A carryback seller is concerned with:

Answer 2

their loan-to-value (LTV) ratio of the purchase price.

Question 3

Adjustments and prorates for unpaid and prepaid items are noted on a seller’s net sheet.

Answer 3

True

Question 4

During a buyer’s market of declining prices and increasing inventory, a sales agent’s main objective is to create buyers.

Answer 4

True

Question 5

To form a contract, an agreement needs to be accompanied by:

Answer 5

an offer and acceptance..
consideration..
capable parties and a lawful purpose

Question 6

An offer to purchase needs to be on a standardized form to be enforceable

Answer 6

False

Question 7

An option to buy agreement is a bilateral contract.

Answer 7

False

Question 8

A seller who is not represented by a broker forms a binding contract with a buyer when:

Answer 8

they are handed a copy of the buyer’s signed counteroffer..

they receive a faxed copy of the buyer’s signed counteroffer.

Question 9

A seller’s counter to an unacceptable offer to purchase can be written on:

Answer 9

a new purchase agreement form..
a counteroffer form.
the original offer using the change-and-initial method.

Question 10

The change-and-initial counteroffer technique is proper even after the original document has been signed.

Answer 10

False

Question 11

Contingency provisions included in purchase agreements are eliminated by:

Answer 11

approval of the information identified as the subject of the provision..
waiver of the right to cancel by the person authorized to cancel.

Question 12

Written contingency provisions include:

Answer 12

who has the right to cancel the purchase agreement if the event does not occur..
a description of the event addressed in the contingency..
the time period in which the event has to occur.

Question 13

The primary user of contingency provisions in purchase agreements is the buyer or buyer’s agent.

Answer 13

True

Question 14

A condition which a buyer needs to perform without concern for whether the seller is performing is called a:

Answer 14

condition concurrent

Question 15

The person with the right to cancel due to the failure of a contingency to occur may only exercise their right if they have a reasonable basis for the cancellation.

Answer 15

True

Question 16

Mutual-benefit contingencies cannot be waived except by mutual consent.

Answer 16

True

Question 17

Checking the availability of fire insurance is an activity addressed by an event-occurrence contingency.

Answer 17

True

Question 18

Personal-satisfaction contingencies are identical to event-occurrence contingencies.

Answer 18

False

Question 19

A retroactive return to a seller’s and buyer’s former, pre-contract positions is called a:

Answer 19

rescission and restoration.

Question 20

A seller may only cancel a transaction via a properly worded contingency provision when:

Answer 20

the seller has performed all acts which are required to precede the event triggering cancellation..
the event fails to occur by the appointed date..
the seller performs all other acts necessary on the seller’s part to close.

Question 21

A buyer may place a seller in default when:

Answer 21

a date crucial to the continuation of the transaction has passed.
the event called for in the purchase agreement failed to occur by the appointed date..
the buyer fully performed all activities required by the appointed date.

Question 22

The authorization-to-extend provision requires the person with a right to cancel on the failure of a contingency to occur to allow the defaulting party a reasonable, additional time period in which to perform.

Answer 22

True

Question 23

Before escrow will call for closing funds, the seller needs to have fully performed

Answer 23

True

Question 24

Agency disputes commonly arise during the __________ period

Answer 24

marketing.
escrow.
post-closing

Question 25

When a sales transaction is rescinded, unknown and unsuspected claims may be waived using a general release agreement.

Answer 25

False

Question 26

After a breach of a purchase agreement, if the property resold for $850,000 and the original purchase price was $550,000, the buyer’s price-to-value demand for recovery is:

Answer 26

300k

Question 27

For a buyer to recover special damages, the expenses incurred need to be a natural and unavoidable result of the seller’s breach.

Answer 27

True

Question 28

A buyer is entitled to 10% interest on amounts recovered for expenses incurred preparing to take title.

Answer 28

True