Unit 26

Question 1

Express contract

Answer 1

Principals agree in writing or verbally to the terms of a contract. Real estate contracts are express

Question 2

Implied contracts

Answer 2

Legal in AZ but difficult to prove in court

Question 3

Unilateral contracts

Answer 3

Such as opinions and right of first refusal, allow only one party to make a promise

Question 4

Bilateral contract

Answer 4

Each party makes a promise to the other (ex: purchase agreement, listing agreement)

Question 5

Void contract

Answer 5

Contract that obligates anything illegal

Question 6

Voidable contract

Answer 6

Valid contract that can be canceled by one of the parties without causing breach

Question 7

Statute of Frauds

Answer 7

Requires all real estate purchase agreements plus any amendments to be in writing

Question 8

At a minimum, a valid offer must contain

Answer 8

Purchase price, legal description, and consideration to be signed by offerors. Under AZ community property laws, both spouses must sign

Question 9

Licensees must promptly present all offers to the seller until

Answer 9

close of escrow or expiration of the listing agreement unless relived of the responsibility by the principal

Question 10

When a purchase agreement enters escrow

Answer 10

Is executory. The designated broker or delegated associate broker must review the purchase doc within 10 business days of the doc execution and ensure that it states the type of EMD and who is holding it. Docs must be retained for no less than 5 yrs

Question 11

Executory period allows buyers and sellers to

Answer 11

Buyers: to do their due diligence and inspect the property
Sellers: required to disclose all latent material issues

Question 12

Contingencies are addressed in executory period

Answer 12

Common contract contingencies are based on HOA rules, inspections, loan approvals, and property appraisals

Question 13

Reasons a contract might be terminated

Answer 13

Contingency not met
Lack of performance
Disclosure info
Change in disclosure info
Inspection issues
Destruction of property
Breach of contract
Inability to secure financing
Rescission

Question 14

When one party to a contract is in danger of breach

Answer 14

the other party may give written notice of the potential breach and offer curative measures

Question 15

Should the seller decide not to sell

Answer 15

Buyer may agree to cancel contract and request return of EMD and any out-of-pocket expenses or sue for specific performance

Question 16

Should the buyer walk away

Answer 16

Most contracts limit the seller to the EMD as damages

Question 17

Property Management agreements

Answer 17

Must be clear
State material terms and conditions
Be signed by owner and manager
Have beginning and end dates
Compensation
Assignment and cancellation terms
Reporting requirements
Disputation of money collected earned interest