Unit 10 Flashcards
1
Q
A broker who represents a seller under an exclusive listing receives two offers for the property at the same time, one from a buyer-client of the firm and one from a buyer-customer. How should the broker handle the offers?
a. Submit the offer from the broker’s firm first.
b. Submit the offer from the other firm first.
c. Submit the higher offer to the seller first.
d. Submit both offers to the seller at the same time.
A
d. Submit both offers to the seller at the same time.
2
Q
- The amount of earnest money deposit is determined by
a. the Real Estate Settlement Procedures Act.
b. an agreement between the parties to the contract.
c. the broker’s office policy on such matters.
d. the listing agreement.
A
b. an agreement between the parties to the contract.
3
Q
- A conventional option contract
a. requires the optionee to complete the purchase within the specified time period, time being of the essence.
b. gives the optionee an easement on the property.
c. allows negotiation of better terms during the option period; yet the seller remains bound to the original contract terms.
d. makes the seller liable for a commission.
A
a. requires the optionee to complete the purchase within the specified time period, time being of the essence.
4
Q
- A prospective buyer makes a written purchase offer through a buyer’s agent at ABC Realty. The seller accepts the offer as written. Seller communicates to a listing agent at XYZ Realty that the offer was signed. At this point in time, the
a. seller is contractually bound.
b. buyer is contractually bound.
c. both parties are contractually bound.
d. buyer can still withdraw the offer.
A
d. buyer can still withdraw the offer.
5
Q
- A buyer agreed to purchase a property for $230,000. The buyer gave a $7,000 earnest money deposit to the listing broker. The seller was unable to transfer clear title, so the buyer subsequently demanded the return of his earnest money. The broker should
a. deduct her commission and return the balance to the buyer if there is no dispute of the return of funds.
b. immediately deposit the money with the county clerk of court.
c. return the entire amount to the buyer only if the seller does not dispute the return.
d. retain the earnest money in the interest-bearing trust account until completion of the second interest cycle.
A
c. return the entire amount to the buyer only if the seller does not dispute the return.
6
Q
- A buyer makes an offer on a $15,000 property and gives an earnest money deposit of $1,500 in the form of a personal check. The buyer then withdraws the offer before the seller can accept it. The broker should dispose of the earnest money by
a. turning it over to the seller.
b. deducting the commission and giving the balance to the seller.
c. returning it to the buyer.
d. depositing it in the broker’s trust account.
A
c. returning it to the buyer.
7
Q
- If an owner takes a property off the market for a definite period of time in exchange for some consideration, but grants the right to purchase the property within that period for a stated price, this is called
a. an option.
b. a contract of sale.
c. a right of first refusal.
d. an installment agreement.
A
a. an option.
8
Q
- Under the NCBA/NCAR 2-T Offer to Purchase and Contract, which of the following BEST describes the due diligence fee?
a. Liquidated damages
b. Legal consideration
c. Good faith money
d. Purchase price deposit
A
b. Legal consideration
9
Q
- When a valid purchase contract is fully executed by the seller and the buyer, the
a. seller retains reversionary rights.
b. buyer transfers equitable title to the lender.
c. seller transfers equitable title to the buyer.
d. buyer forfeits financing contingency rights.
A
c. seller transfers equitable title to the buyer.
10
Q
- Early in the day, a North Carolina broker received an offer on a property listed with his firm. A higher priced second offer for the same property was received later that afternoon. The broker presented the first offer to the seller that evening. The broker did not inform the seller about the second offer so that the seller could make a decision about the first offer without a distraction. Which of the following is TRUE?
a. The broker’s actions are permissible if the second offer is from an agent in the listing firm.
b. After the first offer was received, the broker should have refused all additional offers until the seller accepted or rejected the first offer.
c. The broker is in violation of license law, because the broker has no authority to withhold any offers from the seller.
d. The broker is in violation of license law, because the higher priced second offer should have been presented and addressed first.
A
c. The broker is in violation of license law, because the broker has no authority to withhold any offers from the seller.
11
Q
- A broker has an exclusive right-to-sell listing on a building. An offer to purchase the building is received while the owner is out of town. The offer requires a commitment from the seller before the seller is scheduled to return to the city. Under these circumstances, the
a. broker may create a binding agreement on behalf of the seller.
b. broker may collect a commission even if the transaction falls through because of the seller’s absence from the city.
c. the buyer is obligated to keep the offer open until the seller returns.
d. the broker must obtain the signature of the seller to effect a contract.
A
d. the broker must obtain the signature of the seller to effect a contract.
12
Q
- On Monday, the seller receives a written offer on his vacant lot for $52,000. On Tuesday, the seller counteroffers for a sales price of $54,500. On Friday, the seller withdraws the counteroffer and accepts the original offer of $52,000. Under these conditions,
a. there is a valid agreement because the seller accepted the buyer’s offer exactly as it was originally made.
b. there is no valid agreement because the seller’s counteroffer was a rejection of the buyer’s original offer.
c. there is a valid agreement because the seller accepted before the buyer withdrew the original offer.
d. there is no a valid agreement because the buyer’s original offer was not accepted within 72 hours.
A
b. there is no valid agreement because the seller’s counteroffer was a rejection of the buyer’s original offer.
13
Q
- The optionee in an option to purchase real estate
a. has no obligation to purchase the property.
b. must purchase the property at any time within the option period.
c. must be willing to renegotiate contract terms during the option period.
d. is the prospective seller of the property.
A
a. has no obligation to purchase the property.
14
Q
- The listing broker receives an earnest money deposit with a written offer to purchase that includes a 10-day acceptance clause. On the fifth day, before the offer is accepted, the buyer withdraws the offer and demands the return of the earnest money deposit. In this situation,
a. the buyer cannot withdraw the offer before the end of the 10 days.
b. the buyer has the right to revoke the offer at any time until it is accepted and is entitled to recover the earnest money.
c. the seller is entitled to the earnest money as liquidated damages and is required, per the standard listing agreement, to pay half to the broker.
d. the broker may declare the deposit forfeited and retain it for services
A
b. the buyer has the right to revoke the offer at any time until it is accepted and is entitled to recover the earnest money.
15
Q
- A real estate sales contract becomes valid when
a. the written offer has been signed by both the offeror and offeree.
b. communication of acceptance is given to the offeror or the offeror’s agent.
c. communication of acceptance is given to the offeree or the offeree’s agent.
d. earnest money has been deposited into the escrow agent’s trust account.
A
b. communication of acceptance is given to the offeror or the offeror’s agent.
