Contracts and Relationships with Buyers and Sellers

Question 1

A listing which employs many brokers and also allows the seller to sell without paying a commission is called:

A: Exclusive right to sell
B: Net Listing
C: Open Listing
D: Exclusive Agency

Answer 1

C: Open Listing

Question 2

Alex delivers a contract to Jeffrey and gives Jeffrey five days to accept the offer. One day later Alex withdraws the offer. What is true?

A: alex may withdraw the offer
B: Jeffrey may sue Alex for specific performance
C: Alex must give Jeffrey five days
D: Jeffrey must give written permission for Alex to back out

Answer 2

A: alex may withdraw the offer

Question 3

Alex makes an offer on Bob’s property through a cooperating broker. Alex would be considered the:

A: Grantee
B: Vendor
C: Offeror
D: Grantor

Answer 3

C: Offeror

Question 4

A mortgage contingency clause would contain all of the following EXCEPT:

A: Name of lender
B: Loan amount
C: Interest rate
D: Type of loan

Answer 4

A: Name of lender

Question 5

What type of agency is created when a salesperson lists a property for sale?

A: Implied- Ostensible
B: Ratification
C: Expressed- Actual
D: Estoppel

Answer 5

C: Expressed- Actual

Question 6

As a salesperson you want to buy a property that you are about to list. At what time do you inform the owner of your intentions to buy?

A: Before the clos of escrow
B: After you list the property
C: Before you list the property
D: Notification is not necessary

Answer 6

C: Before you list the property

Question 7

An investor of a commercial property would like an option to purchase. What would apply to the option?

A: Consideration for option
B: Title insurance
C: Opening of escrow when option is given
D: Loan commitment when option is give

Answer 7

A: Consideration for option

Question 8

A seller signs an exclusive agency with a broker. The seller then sells their property with no help from the broker. What is true regarding the commission?

A: the broker would receive one half of the commission
B: no commission would be paid
C: the broker would receive all costs to market the property
D: A full commission is due

Answer 8

B: no commission would be paid

Question 9

A Seller accepts a sales contract with a close of escrow in 90 days. What is the position of the buyer?

A: Option to buy
B: First right to refuse
C: Equitable title
D: Legal title

Answer 9

C: Equitable title

Question 10

What is an essential element when a sales agent writes a real estate contract?

A: Closing date
B: Consideration
C: Earnest Money
D: Type of financing

Answer 10

B: Consideration

Question 11

A listing agent intentionally fails to tell the buyer of a known defect on the property that later harms the buyer. The listing agent could be guilty of:

A: Violation of anti-trust laws
B: Puffing
C: Violation of RESPA
D: Fraud

Answer 11

D: Fraud

Question 12

What is the status of an option once the optionee has exercised it?

A: Executed
B: Executory
C: Unilateral
D: Bilateral

Answer 12

A: Executed

Question 13

A real estate purchase contract must have which of the following listed below?

A: Buyers earnest money
B: Inspection period
C: Opened escrow
D: Consideration

Answer 13

D: Consideration

Question 14

What will terminate a listing agreement?

A: Death of the seller
B: Change in sellers financial condition
C: Death of the salesperson
D: Increase in property value

Answer 14

A: Death of the seller

Question 15

Legal action to enforce a contract is called:

A: Executory
B: Laches
C: Specific performance
D: made whole

Answer 15

C: Specific performance

Question 16

In an agency relationship the broker would owe the third party customer:

A: No disclosure due to customer status
B: Fiduciary
C: Full disclosure of all information concerning the seller
D: Full disclosure of material facts

Answer 16

D: Full disclosure of material facts

Question 17

What is it called when any broker can sell a listing and receive a full commission?

A: Exclusive Agency
B: Exclusive right to sell
C: Net
D: Open

Answer 17

D: Open

Question 18

How do appraisers measure the square footage of a residential property?

A: Exterior measurements
B: Interior measurements plus closets
C: Exterior measurements minus closets
D: Interior measurements

Answer 18

A: Exterior measurements

Question 19

In real estate matters, “open housing” means:

A: Celebration by the purchaser of a new home
B: A social party in a new subdivision
C: A model house in a subdivision development
D: Prevention or elimination of discrimination in housing

Answer 19

D: Prevention or elimination of discrimination in housing

Question 20

A sales agent solicits homeowners to list their properties by suggesting a wave of minorities is moving into the neighborhood. The salesperson is guilty of:

A: Redlining
B: Blockbusting
C: Steering
D: Panic buying

Answer 20

B: Blockbusting

Question 21

A salesperson is aware of a chemical plant that will be built close to houses the salesperson is showing a prospective buyer. What should the salesperson do?

A: Disclose it only if it looks like there will be a sale
B: Not disclose it for fear of losing a sale
C: Disclose the info as it might be a material fact to a prospective buyer
D: Not disclose it because it isn’t built yet

Answer 21

C: Disclose the info as it might be a material fact to a prospective buyer

Question 22

Allen makes an offer to Bill and Bill counter offers and then dies. Which is true?

A: No contract exists
B: The agreement is binding on A’s heir
C: The agreement is binding on B’s heir
D: A contract exists

Answer 22

A: No contract exists

Question 23

A purchase contract is signed and it states that earnest money is to be released to the buyer after the home inspection is complete. The buyer asked the broker to release the earnest money before the home inspection. What should the broker do?

A: Refuse to release money to buyer
B: Release the money to the buyer
C: Release the money to buyer with only sellers verbal agreement
D: Inform sellers of the buyers request and as long as all parties to the contract agree it can be released

Answer 23

D: Inform sellers of the buyers request and as long as all parties to the contract agree it can be released

Question 24

In a real estate transaction who is the principal?

A: Sub- Agent
B: Broker
C: Client
D: Customer

Answer 24

C: Client

Question 25

In the sale of new homes in a subdivision the on-site real estate licensee typically represents all of the following persons except: A: Builder B: buyer C: Seller D: Seller's broker

Answer 25

B: buyer

Question 26

A couple walk into a sale agent's office looking to buy a new home. The sales agent perceives the couple to be of a certain religious background; he shows them property only in areas of town with a high concentration of the same religion. The sales agent is guilty of: A: Panic buying B: Redlining C: Steering D: Blockbusting

Answer 26

C: Steering

Question 27

A property owner leases a house to a tenant and will deliver the title to the tenant at a later date. This transaction is known as a/an: A: Lease Option B: Devise estate C: Estate for years D: Reversion Estate

Answer 27

A: Lease Option

Question 28

A salesperson presents a full-price offer from a financially qualified black prospect. Later, the salesperson's broker presents a lower offer to the same seller from a white prospect. The seller accepts neither of these contracts but sells to a neighbor (through the same salesperson and broker) who decides to buy the house to prevent the black prospect from purchasing the property next door to him. Which of the following parties would not be subject to liability under theFederal Fair Housing Act of 1968? A: the salespersons B: the white prospect C: the seller D: the neighbor

Answer 28

B: the white prospect

Question 29

To prevent the seller of a business from opening another similar business in the same or nearby area, the buyer of a business may require the seller to sign a(n): A: anti-trust agreement B: covenant not to compete C: letter of intent D: deed restriction

Answer 29

B: covenant not to compete

Question 30

A valid written contract must contain: A: evidence of redecoration B: Monetary consideration C: An offer and acceptance D: Notarized signatures

Answer 30

C: An offer and acceptance

Question 31

A property owner tells his agent that he may represent the property and make other decisions concerning that property. What type of agency is this? A: Universal B: Limited C: General D: Specific

Answer 31

C: General

Question 32

At a weekly office meeting, there is discussion over the fact that some agents are getting more listings by charging less commission. Everyone agrees to charge the same commission on residential property to avoid undercutting any other agent. The agents are guilty of: A: Nothing B: The anti-blockbusting statute C: The Sherman Antitrust Act D: The Federal Fair Housing Act

Answer 32

A: Nothing

Question 33

The sources of law that affect real estate transaction and activity are: A: Local Ordinances passed by towns, cities, and villages B: State and federal legislation's C: Court decisions D: All of the answers

Answer 33

D: All of the answers

Question 34

If a husband and wife buy real property and the wife fails to sign the purchase contract, the contract is: A: Illegal B: Unenforceable against both C: Valid against both D: Void

Answer 34

B: Unenforceable against both

Question 35

A sales agent is showing a married couple a one-bedroom apartment, but informs them that the unit is not available for them because it is reserved for singles only. Which statute has the agent violated? A: The Federal Fair Housing Act B: The Civil Rights Act of 1866 C: None of the answers D: The Sherman Antitrust Act

Answer 35

C: None of the answers

Question 36

Livable square footage of a home is determined by: A: Interior dimensions of the house less partitions and closets B: Exterior dimensions of the house, excluding the garage C: Interior dimension of the house D: The entire area under roof

Answer 36

B: Exterior dimensions of the house, excluding the garage

Question 37

In a suit brought under the Federal Fair Housing Law as amended, punitive damages may be as much as: A: $1,000.00 B: $10,000.00 C: There is no limit on punitive damages D: $50,000.00

Answer 37

C: There is no limit on punitive damages

Question 38

If the seller breaches the purchase contract the buyer may seek: A: Punitive damages B: Anti- trust violations C: Acceleration D: Specific performance

Answer 38

D: Specific performance

Question 39

John is charged with violation of the Civil Rights Act of 1866 because he discriminated against a woman while showing her a house. A: John may be charged in the state court with violation of the Civil Rights Act of 1866 B: John is in violation only if he advertises that the property is not available to women C: John is guilty of discrimination D: John is not guilty of unlawful discrimination

Answer 39

D: John is not guilty of unlawful discrimination

Question 40

Compensatory damages would be the closest to: A: Punitive damages B: Specific Performance C: Actual damages D: Earnest Money

Answer 40

C: Actual damages

Question 41

An owner signs a six month listing. The owner dies before a valid offer is presented. What is the status of the offer? A: The heirs are bound to accept the offer B: The heirs would be required to sign a new listing C: The listing terminated once the owner died D: The listing broker may sue for a commission

Answer 41

C: The listing terminated once the owner died

Question 42

Liquidated damages refer to: A: Punitive damages B: Specific performance plus equal and just compensation C: The amount of compensation the damages party will receive D: Contingencies that cant be unenforceable

Answer 42

C: The amount of compensation the damages party will receive