Practice Quizzes 3 Flashcards
The use of a _______________ requires a written carryback disclosure form on one-tofour unit residential property when the seller will partially finance the sale.
land sales contract.
lease-option.
an unexecuted purchase agreement with interim occupancy
A carryback seller is concerned with:
their loan-to-value (LTV) ratio of the purchase price.
Adjustments and prorates for unpaid and prepaid items are noted on a seller’s net sheet.
True
During a buyer’s market of declining prices and increasing inventory, a sales agent’s main objective is to create buyers.
True
To form a contract, an agreement needs to be accompanied by:
an offer and acceptance..
consideration..
capable parties and a lawful purpose
An offer to purchase needs to be on a standardized form to be enforceable
False
An option to buy agreement is a bilateral contract.
False
A seller who is not represented by a broker forms a binding contract with a buyer when:
they are handed a copy of the buyer’s signed counteroffer..
they receive a faxed copy of the buyer’s signed counteroffer.
A seller’s counter to an unacceptable offer to purchase can be written on:
a new purchase agreement form..
a counteroffer form.
the original offer using the change-and-initial method.
The change-and-initial counteroffer technique is proper even after the original document has been signed.
False
Contingency provisions included in purchase agreements are eliminated by:
approval of the information identified as the subject of the provision..
waiver of the right to cancel by the person authorized to cancel.
Written contingency provisions include:
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.
The primary user of contingency provisions in purchase agreements is the buyer or buyer’s agent.
True
A condition which a buyer needs to perform without concern for whether the seller is performing is called a:
condition concurrent
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.
True
Mutual-benefit contingencies cannot be waived except by mutual consent.
True
Checking the availability of fire insurance is an activity addressed by an event-occurrence contingency.
True
Personal-satisfaction contingencies are identical to event-occurrence contingencies.
False
A retroactive return to a seller’s and buyer’s former, pre-contract positions is called a:
rescission and restoration.
A seller may only cancel a transaction via a properly worded contingency provision when:
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.
A buyer may place a seller in default when:
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.
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.
True
Before escrow will call for closing funds, the seller needs to have fully performed
True
Agency disputes commonly arise during the __________ period
marketing.
escrow.
post-closing
When a sales transaction is rescinded, unknown and unsuspected claims may be waived using a general release agreement.
False
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:
300k
For a buyer to recover special damages, the expenses incurred need to be a natural and unavoidable result of the seller’s breach.
True
A buyer is entitled to 10% interest on amounts recovered for expenses incurred preparing to take title.
True
