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15 Cards in this Set
- Front
- Back
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An offer is terminated by: a. rejection by the offeror. b. rejection by the offeree. c. revocation by the offeree. d. a request for an extension by the offeree. |
b. rejection by the offeree. (This requires knowing who is who in the question. The offeror is the person who made the offer. The offeree is the person who may accept or reject an offer.) |
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On an exclusive listing, a broker is not disciplined for failure to: a. attach a tax statement to the listing. b. give a copy of the listing agreement to the seller. c. include a definite termination date. d. represent the best interests of their client. |
a. attach a tax statement to the listing. (An exclusive listing requires a definite termination date. Further, copies of all documents that are signed need to be given to the person who signed them. A tax statement does not need to be attached to the listing.) |
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In a contract, the terms "adequate, valuable, good or sufficient" refer to: a. capital. b. consideration. c. character. d. compensation. |
b. consideration. (Consideration is something of value provided to both participants to a contract which induces them to perform. Question 3 is premised on a similar topic. Get in the habit of recognizing when a question or answer choice offers information which relates to a later question.) |
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The following persons may not lawfully enter into a valid contract to purchase property, except: a. unemancipated minors. b. minors who are wards of the court. c. convicts. d. international buyers. |
d. international buyers. (Foreign buyers may lawfully enter into a valid contract to purchase property.) |
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A real estate transaction in which the buyer gains possession of a property while the seller retains legal title until the debt is fully repaid is an example of a(n): a. mortgage. b. trust deed. c. land sales contract. d. sublease. |
c. land sales contract. (Neither trust deeds nor mortgages transfer possession without concurrently transferring legal title.) |
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The right of possession and equitable title is held by the: a. vendee. b. vendor. c. trustee. d. trustor. |
a. vendee. (In most cases, the party name ending in "or" owns the real estate. In the instance of a land contract, the "ee" (vendee) is the buyer and therefore has possession and equitable title of a property, but not legal title.) |
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Under a land sales contract for the sale of real property, legal title is held by the: a. trustor. b. beneficiary. c. vendee. d. vendor. |
d. vendor. (This is the reverse version of Question 18. Again, the vendor (seller) holds legal title to the property until the debt is repaid in full.) |
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Upon the default of a buyer under a land sales contract, the seller: a. instructs the trustee to initiate foreclosure. b. requests a deficiency judgment against the buyer through the courts. c. files a quiet title action. d. files a lis pendens action. |
c. files a quiet title action. (In the instance of a land contract, also known as a contract sale, there is no trustee. Further, the vendor already has legal title to the property so answer selection D would impact them (the seller) rather than the vendee (the buyer). Thus, on a default by the buyer, the seller files a quiet title action.) |
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When Jack sells his home, he wants to be relieved of the primary liability for payment of the existing loan. He needs to find a buyer who is willing to: a. take the property subject to the existing loan. b. assume the existing loan. c. execute a land contract. d. make a large down payment. |
b. assume the existing loan. (The buyer's assumption of the loan is the only answer selection offered that will relieve the seller of the primary responsibility for the underlying debt. Though the obvious answer would be for the seller to pay off the loan, that answer selection is not provided and therefore cannot be selected.) |
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Which of the following is true concerning an option? a. A fiduciary duty exists between the optionor and the optionee. b. Only the optionor is bound to perform under the terms of an option. c. Consideration does not actually have to change hands so long as the option says it has. d. The optionee has created a legal interest in the property. |
b. Only the optionor is bound to perform under the terms of an option. (The optionor is the owner of the real estate. Thus, the optionor is the only party obligated to perform under the terms of the option.) |
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A buyer and seller initial the liquidated damages clause in a real estate purchase agreement. The buyer later defaults. The amount recoverable is: a. given to the seller when escrow opens. b. limited to 3% of the selling price. c. given to the seller after the default. d. used to pay any costs incurred by the seller and then returned to the buyer. |
c. given to the seller after the default. (The amount recoverable under a liquidated damages provision in a purchase agreement is not always limited to 3%, only for one-to-four unit residential property. The only answer that is true is C.) |
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Heather made an offer to purchase real property. The seller accepted the offer but Heather died before this acceptance was communicated to her by the seller's agent. Based on these facts, which of the following is true? a. Notification of the seller's acceptance to the administrator or executor of Heather's estate compels her estate to perform and close escrow. b. The death of Heather constitutes a revocation of the offer. c. The offer and acceptance constitute an enforceable contract, even if Heather was not aware of the acceptance. d. The accepted offer is binding on the administrator's estate since the deed was not delivered before Heather's death. |
b. The death of Heather constitutes a revocation of the offer. (Had the buyer's death occurred after communication of the acceptance of the offer by the seller's agent, her estate would have been responsible to complete the escrow.) |
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The instrument most likely to state that "time is of the essence" is a(n): a. exclusive authorization and right to sell. b. real estate purchase contract. c. open listing. d. option. |
b. real estate purchase contract. (The purchase agreement is the only contract offered that would require a response from the opposing party within a stated period of time. This is a good example of a question in which the wrong answers may be eliminated, thus leaving only the correct one remaining.) |
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A real estate buyer can rescind an offer until: a. the seller has agreed to an appointment. b. the offer has been presented to the seller. c. the seller has accepted the offer. d. the seller's acceptance has been communicated to the buyer. |
d. the seller's acceptance has been communicated to the buyer. (As shown in Question 43, it is the communication of the acceptance of the offer to the buyer that limits their ability to rescind the offer.) |
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To be enforceable, the listing of a business opportunity: a. needs to be in writing. b. never has to be in writing. c. does not always have to be in writing. d. needs to be exclusive. |
c. does not always have to be in writing. (Be wary of "never" and "always" in questions such as this. In this case, a business opportunity sale may include real estate which requires the listing to be in writing. Recognize that an open listing is not exclusive and yet is still valid and enforceable.) |
