Unit quiz 12 Flashcards
A contract for the sale of real estate that does not state the consideration and provides no basis on which the consideration could be determined is considered
Void
A contract is said to be executed when it includes the
Signatures of the parties
A contract is said to be executed when it is signed, even though the parties have not fully executed the contract by fulfilling all of the promises that it contains.
A person approaches an owner and says, “I’d like to buy your house.” The owner says, “Sure,” and they agree on a price. What kind of contract is this?
A) Unenforceable
B) No contract
C) Implied
D) Void
A) Unenforceable
A buyer signs a contract under which he is given the right to purchase a property for $130,000 anytime in the next six months. The buyer pays the current owner $500 at the time that contract is signed. Which of the following BEST describes this agreement?
A) Installment
B) Option
C) Contingency
D) Sales
B) Option
The buyer has purchased an option. The $500 is the option price. If he doesn’t exercise the option (state his firm intention to buy the property) within the three-month option period, the option will lapse.
During the period of time after a real estate sales contract is signed, but before title actually passes, the status of the contract is
A) implied.
B) executory.
C) unilateral.
D) voidable.
B) executory.
A buyer makes an offer to purchase certain property listed with a real estate professional and leaves an escrow deposit with the real estate professional to show good faith. The real estate professional should
A) put the deposit in an account, as provided by state law.
B) give the deposit to the seller when the offer is presented.
C) put the deposit in the real estate professional’s personal checking account.
D) immediately apply the deposit to the listing expenses.
A) put the deposit in an account, as provided by state law.
Most states require real estate professionals to place earnest money and other funds held in trust in a specified account used only for such money
Real estate professionals who mix the company’s money with deposits and trust funds are guilty of
commingling funds.
A buyer and a seller enter into a real estate sales contract. Under the contract’s terms, the buyer will pay the seller $500 a month for 10 years. The seller will continue to hold legal title, while the buyer will live in the home and pay all real estate taxes, insurance premiums, and regular upkeep costs. What kind of contract do the buyer and seller have?
A) Land sales contract
B) Contract for mortgage
C) Unilateral contract
D) Option contract
A) Land sales contract
his arrangement has a variety of names: contract for a deed, land contract, installment contract, land sales contract, and more. Its most important characteristic is that no deed is given to the buyer (vendee) until all the payments in the contract have been made, although some states give the buyer an equitable interest in the property after a specified period of successful payments
A buyer and a seller agree on a purchase price of $200,000 for a house. The contract contains a clause stating that “time is of the essence.” Which statement isTRUE?
A) If the closing date passes and no closing takes place, the contract may be rescinded by the party who was ready to settle on the scheduled date.
B) The closing date must be stated as a particular calendar date, and not simply as a formula, such as “two weeks after loan approval.”
C) The closing must take place within a reasonable period before the stated date.
D) A “time is of the essence” clause is not binding on either party.
A) If the closing date passes and no closing takes place, the contract may be rescinded by the party who was ready to settle on the scheduled date.
“Time is of the essence” refers to the settlement date. If one party fails to go to settlement by that date, the other party may rescind (cancel) the contract.
Substitution of a new contract for an existing contract is called
Novation
Under the statute of frauds, all contracts for the sale of real estate must be
in writing to be enforceable.
Ture or false: Earnest money is an essential feature of a contract of sale,
False
Earnest money is not an essential feature of a contract of sale, although it is often mistakenly said to be.
