Purchase Contracts 5

Question 1

Expresses the Parties Intention to Invest in Buy or Develop a Property Withtout Creating a Binding Legal Obligations to do so.

Answer 1

Letter of Intent -

Expresses the Parties Intention to Invest in Buy or Develop a Property Withtout Creating a Binding Legal Obligations to do so.

Chap 5

Question 2

What agreements are assignable?

Answer 2

Purchase Agreements and Leases -

Assignable

Chap 5

Question 3

Assignor is the Person that Assigns Transfer of Rights, and the Assignee is the Person that Gets Rights Transfered to. Who has 1st and 2nd Liability in the Transfer of Rights?

Deals with Purchase Contracts and Leases, unless prohibited.

Answer 3

During the Assignment of Contract Rights -

1. Assignor (Assigning Rights) - 1st Liability
2. Assignee (Rights Transfered To) - 2nd Liability

Deals with Purchase Contracts and Leases, unless prohibited.

Chap 5

Question 4

Conv____ of F_____

Agent uses Trust Funds for His/Her Own Use

Answer 4

Conversion of Funds - Own Use

Agent Uses Trust Funds for Own Use

Chap 5

Question 5

Resc_____ of Contract -

1. Mutual Agreement to Cancel,
2. Restoring Parties - Original Positions.
3. Broker must follow Buyer and Seller’s Instructions

Answer 5

Rescission of Contract -

1. Mutual Agreement to Cancel,
2. Restoring Parties - Original Positions.
3. Broker must follow Buyer and Seller’s Instructions

Chap 5

Question 6

Clause that Allows Party to Withdraw. Contingent Upon a Certain Condition/Event. Voids Contract.

Answer 6

Contingency Clause -

Clause that Allows party to Withdraw. Contingent Upon a Certain Condition/Event. Voids Contract.

Chap 5

Question 7

N___ H___ Sales Contacts

Contracts where Earnest Money** is **Not Held in Escrow but in Business Account

Answer 7

New Home Sales Contracts -

Contracts where Earnest Money** is **Not** **Held in Escrow but in Business Account

Chap 5

Question 8

M_____ C_______ C_____

Clause where Contingency is Based On Buyer Obtaining Financing**. **Specifies:

1. Amount,
2. Interest Rate
3. Terms,
4. Commitment Date

Answer 8

Mortgage Contingency Clause -

Clause Contingency Based On** Buyer Obtaining **Financing.Specifies:

1. Amount,
2. Interest Rate,
3. Terms,
4. Commitment Date

Chap 5

Question 9

Rotted Wood and Cellulose Debris is part of what inspection?

Answer 9

Termite Inspection -

Rotted Wood and Cellulose fall under this type of inspection.

Pest Control is Licensed by: AZ Dept of Agriculture

Chap 5

Question 10

Clause where Contingency is Based On Buyer obtaining Financing. Specifies:

1. Amount,
2. Interest Rate,
3. Terms,
4. Commitment Date

Answer 10

Mortgage Contingency Clause -

Clause Contingency Based On Buyer obtaining Financing. Specifies:

1. Amount,
2. Interest Rate,
3. Terms,
4. Commitment Date

Chap 5

Question 11

Termite Inspectors are License by whom?

Answer 11

AZ Dept of Agriculture -

Licensing for Termite Inspectors

Chap 5

Question 12

AZ State Board of Te______ Regis_______

Home Inspectors are Licensed by whom?

Answer 12

AZ State Board of Technical Registration -

Licensing for Home Inspectors

Chap 5

Question 13

Pre-printed Words are these. And the Written Word Always Prevails.

Answer 13

Boiler Plate -

Pre-Printed Words are these. And the Hand Written Word Always Prevails.

Chap 5

Question 14

Cl___ of Es____

Typically Occurs when Deeds are Recorded

Answer 14

Close of Escrow -

Typically Occurs when Deed Recorded

Chap 5

Question 15

Person or Entity Other Than the Policy Holder who is Covered by Policy

Answer 15

Additional Insured -

Person or Entity Other Than the Policy Holder who is Covered by Policy

Chap 5

Question 16

If Buyer Defaults - Seller May:

1. Allow W______
2. Retain Earnest Money as L______ Damages
3. Sue for Damages “Sp_____ P_____“ in Court.

…

Answer 16

If Buyer Defaults - Seller May:

1. Allow Withdraw,
2. Retain Earnest Money as Liquidated Damages
3. Sue for Damages “Specific Performance” in Court.

Chap 5

Question 17

If Seller Defaults - Buyer May:

1. Allow W_______,
2. Sue for Damages “Sp_____ P_______” in Court

Answer 17

If Seller Defaults - Buyer May:

1. Allow Withdrawal,
2. Sue for Damages “Specific Performance” in Court

Chap 5

Question 18

Cav___ Em___

Latin Term for Obvious Defects - Buyer is responsible, which means Buyer Beware Of.

Answer 18

Caveat Emptor -

Latin Term for Obvious Defects - Buyer is responsible, which means Buyer Beware Of

Chap 5

Question 19

Dispute Resolution “Process” to help Resolve Differences, Conducted by a 3rd Party.

Answer 19

Mediation -

Dispute Resolution “Process” to help Resolve Differences, Conducted by a 3rd Party.

Chap 5

Question 20

Non-Judicial Submission to a Third Party, where Both Parties Agree to Comply with Final Decision by 3rd Party as Binding

Answer 20

Arbitration -

Non-Judicial Submission to a Third Party, where Both Parties Agree to Comply with Final Decision by 3rd Party as Binding

Chap 5

Question 21

In these Type of Offers, Seller Can Reserve the Right to Counter Multiple Offers and Accept Any He Receives from Buyer.

Answer 21

Multiple Offers/Counter Offers -

In these Type of Offers, Seller Can Reserve the Right to Counter Multiple Offers and Accept Any He Receives from Buyer.

Chap 5

Question 22

If a Buyer Makes Multiple Offers on Different Properties, what must he do?

Answer 22

Buyers Multiple Offers:

Buyer must Disclose in Each Offer, that He is Making Multiple Offers.

Chap 5

Question 23

After Written Acceptance of an Offer, what Type of Title does Buyer Have?

Answer 23

Equitable Title -

After Written Acceptance of Offer, Buyer has this Type of Title, and Contract is Exectory.

Chap 5

Question 24

Indemni______ C______

Hold Harmless Clause. One Party Protects Another Party from Damage.

Answer 24

Indemnification Clause -

Hold Harmless Clause. One Party Protects Another Party from Damage.

Chap 5

Question 25

An Invitation to Enter Into a Contract

Answer 25

**Offer -** An Invitation to Enter Into a Contract **Chap 5**

Question 26

The Buyer who Makes the Offer is called?

Answer 26

**Offeror -** Person Who Makes the Offer **Chap 5**

Question 27

**An Offer** **Made by the Offeree to the Offeror**, which **Modifies the Offeror's Original Offer**

Answer 27

**Counter Offer -** **An Offer** **Made by the Offeree to the Offeror**, which **Modifies the Offeror's Original Offer**. **Chap 5**

Question 28

**Term used a Purchase Contract or Lease** to indicate that the **Buyer/Lessee may _Name Another Person or Entity_ Who Will Complete the Transaction.**

Answer 28

**Nominee -** **Term used a Purchase Contract or Lease** to indicate that the **Buyer/Lessee may _Name Another Person or Entity_ Who Will Complete the Transaction.** **Chap 5**

Question 29

**Buyer's Money Given to Show Good Faith to Seller** to Complete the Transaction. As a check, cash, or note

Answer 29

**Earnest Money -** **Buyer's Money Given to Show Good Faith to Seller** to Complete the Transaction. As a check, cash or note **Chap 5**

Question 30

**Tr\_\_\_\_\_ Ac\_\_\_\_\_** **Any Type of Financial Account (Federally Insured****} that is Opened by an Individual and Managed by a Designated Trustee for the Benefit of a Third Party (the Beneficiary) as Per Agreed-Upon Terms** **Brokers In AZ Not Required to Maintain Trust Account unles Engaged In Propety Management (Chap 15)**

Answer 30

**Trust Account -** **Any Type of Financial Account (Federally Insured****} that is Opened by an Individual and Managed by a Designated Trustee for the Benefit of a Third Party (the Beneficiary) as Per Agreed-Upon Terms** **Brokers In AZ Not Required to Maintain Trust Account unles Engaged In Propety Management (Chap 15)** **Chap 5**

Question 31

**Legal Arrangement** in which a **Third Party Temporarily holds Large Sums "_Money or Property**_ _**Until Particular Conditions has been met_** (e.g., Purchase Agreement Fullfilment).

Answer 31

**Escrow -** **Legal Arrangement** in which a **Third Party Temporarily holds Large Sums "_Money or Property_"** **_Until Particular Conditions_** has been **met** (e.g., Purchase Agreement Fullfilment). **Chap 5**

Question 32

**Disinterested** **Nuetral Third Party** Hired to Close the Transaction

Answer 32

**Escrow Agent -** **Disinterested** **Nuetral Third Party** Hired to Close the Transaction. **Chap 5**

Question 33

**Mixing of Client's Funds** with **_Broker's Business/Personal Accounts_**

Answer 33

**Commingling -** **Mixing of Client's Funds** with **_Broker's Business/Personal Accounts._** **Chap 5**

Question 34

**Simultaneous Escrows on Same Property**, where **Buyer** has Sold Property Prior to Escrow Closing, **Uses Some of Proceeds From that Sale to Fund Another Purchase.**

Answer 34

**Double Escrow -** **Simultaneous Escrows on Same Property**, where **Buyer** has Sold Property Prior to Escrow Closing, **Uses Some of Proceeds From that Sale to Fund Another Purchase.** **Chap 5**

Question 35

**Specifies What Items will be Split** and The Date of Such Spilts (usually Close of Escrow).

Answer 35

**Prorations -** **Specifies What Items will be Split** and The Date of Such Spilts (usually Close of Escrow). **Chap 5**

Question 36

**L\_\_\_ P\_\_\_\_** **_Person Designated_** **in** **Insurance Policy** **_To Be Paid_**, **If Property is Damaged or Destroyed**. **(ex: Morgage Lender)**

Answer 36

**Loss Payee -** **_Person Designated_** **in** **Insurance Policy** **_To Be Paid_**, **If Property is Damaged or Destroyed**. **(ex: Morgage Lender)** **Chap 5**

Question 37

**Cla\_\_\_ H\_\_\_\_\_ and Cl\_\_\_ Report** A **Record of Insurance Losses** on a **Property** **or Specific Consumer** is called? (Answer has 2 names)

Answer 37

**Claims History / Clue Report** - **A Record of Losses On a Property** or Specific Consumer. **Chap 5**

Question 38

**Service Contract Covering the Repairs or Replacement** **of Appliances/Systems,** Such as Furnaces, Air Conditioners, Plumbing, Roof, etc.

Answer 38

**Home Warranty -** **Service Contract Covering the Repairs or Replacement** **of Appliances/Systems,** Such as Furnaces, Air Conditioners, Plumbing, Roof, etc. **Chap 5**

Question 39

**Amount Pre-Determined** By the Parties as **Total Amount of** **Compensation an Injured Party Should Receive - For Breach of Contract.**

Answer 39

**Liquidated Damages -** **Amount Pre-Determined** By the Parties as **Total Amount of** **Compensation an Injured Party Should Receive - For Breach of Contract.** **Chap 5**

Question 40

**Sp\_\_\_\_\_\_\_ P\_\_\_\_\_\_\_\_** **_Court Order to Enforce_ Terms** **of a Contract is Called?**

Answer 40

**Specific Performance -** **_Court Order to Enforce_ Terms** **of a Contract** **Chap 5**

Question 41

**Making Over-Statements of Personal Opinion,** is not considered misrepresentation.

Answer 41

**Puffing -** **Making Over-Statements of Personal Opinion,** is not considered misrepresentation. **Chap 5**

Question 42

**False Statements of Material Facts** Which a Party Relies on to His Damage.

Answer 42

**Misrepresentation -** **False Statements of Material Facts** Which a Party Relies on to His Damage. **Chap 5**

Question 43

Occurs When **Person** **_Intentionally_ Misrepresents a Fact.**

Answer 43

**Fraudulent Misrepresentation -** Occurs When **Person** **_Intentionally_ Misrepresents a Fact.** **Chap 5**

Question 44

**Id\_\_\_\_\_ Th\_\_\_\_** **Using Another Person's _Personal Info for Illegal Purposes_**. **Real Estate Agents must Safeguard Clients' and Consumers' Information.**

Answer 44

**Identity Theft -** **Using Another Person's Personal Info for Illegal Purposes**. **Real Estate Agents must Safeguard Clients' and Consumers' Information.** **Chap 5**

Question 45

Occurs When **Hacker Intercepts Email** and **Sends Fraudulent Wiring Instructions** Directing Client's Money **to Hacker's Account**

Answer 45

**Wire Fraud -** Occurs When **Hacker Intercepts Email** and **Sends Fraudulent Wiring Instructions** Directing Client's Money **to Hacker's Account** **Chap 5**

Question 46

**The Amount of the Earnest Money is determined by the:** 1. Buyer 2. Seller 3. Buyer and Seller 4. Broker

Answer 46

**The Amount of the Earnest Money is determined by the:** 1. Buyer 2. Seller 3. **Buyer and Seller** 4. Broker **Chap 5**

Question 47

**While making a Listing Presentation to a Seller, a Licensee is also considering Purchasing the Property. In this situation does the Agent need to Disclose their Intentions to Buy to Seller and why?** 1. No, beause there is No Need to Discuss Personal Issues. 2. No, because the Licensee is Not Yet the Seller's Agent 3. Yes, because it May Have an Impact on the Owner's Decision to List with the Agent 4. Yes, because it is Required by the Statute of Frauds.

Answer 47

**While making a listing presentation to a seller, a licensee is also considering purchasing the property. In this situation does the agent neeed to disclose their intentions to the seller and why?** 1. No, beause there is No Need to Discuss Personal Issues. 2. No, because the Licensee is Not Yet the Seller's Agent 3. **Yes, because it May Have an Impact on the Owner's Decision to List with the Agent** 4. Yes, because it is Required by the Statute of Frauds. **Chap 5**

Question 48

**Buyer Makes an Offer to Purchase a Home Listed by a Broker, but the Seller is Not Available until Wednesday. On Tuesday Buyer Wishes to Withdraw the Offer. Which of the following statements iis correct?** 1. Buyer cannot do this as he has signed contract 2. Buyer must forfeit the Earnest Money 3. The Broker must Return the Deposit and Offer 4. The Broker should tell Buyer the Offer is Accepted.

Answer 48

**Buyer Makes an Offer to Purchase a Home Listed by a Broker, but the Seller is Not Available until Wednesday. On Tuesday Buyer Wishes to Withdraw the Offer. Which of the following statements iis correct?** 1. Buyer cannot do this as he has signed contract 2. Buyer must forfeit the Earnest Money 3. **The Broker must Return the Deposit and Offer** 4. The Broker should tell Buyer the Offer is Accepted. **Chap 5**

Question 49

**An Escrow once established, is subject to Recission by:** 1. The Broker 2. Only the Seller 3. Onlly the Buyer 4. An Agreement between Buyer and Seller

Answer 49

**An Escrow once established, is subject to Recission by:** 1. The Broker 2. Only the Seller 3. Onlly the Buyer 4. **An Agreement between Buyer and Seller** **Chap 5**

Question 50

**A Property was listed for $45,000. Broker brings a Buyer who offers $44,000. The seller then counters with $44,500 but the counter offer is NOT accepted by the Buyer. Later the Seller decides to accept the $44,000 offer. Which of the following statements is correct?** 1. Broker is Entitled to Commission 2. There is a Contract in Effect for $44,500 3. There is a Contract in Effect for $44,000 4. There is No Contract In Effect

Answer 50

**A Property was listed for $45,000. Broker brings a Buyer who offers $44,000. The seller then counters with $44,500 but the counter offer is NOT accepted by the Buyer. Later the Seller decides to accept the $44,000 offer. Which of the following statements is correct?** 1. Broker is Entitled to Commission 2. There is a Contract in Effect for $44,500 3. There is a Contract in Effect for $44,000 4. **There is No Contract In Effect** **Note: In Real LIfe the Original Offer for $44,000 could still be accepted (Answer C)** **Chap 5**

Question 51

**An Offer to Purchase is An:** 1. Unilateral Contract 2. Expression of Intent to Enter a Contract 3. Bilateral Contract to Purchase 4. Binding On the Offeror

Answer 51

**An Offer to Purchase is An:** 1. Unilateral Contract 2. **Expression of Intent to Enter a Contract** 3. Bilateral Contract to Purchase 4. Binding On the Offeror **Chap 5**

Question 52

**Earnest Money is normally held by:** 1. By Listing Agent's Broker 2. By Buyer's Agent's Broker 3. Only in Broker's Trust Account 4. By The Seller

Answer 52

**Earnest Money is normally held by:** 1. By Listing Agent's Broker 2. **By Buyer's Agent's Broker** 3. Only in Broker's Trust Account 4. By The Seller **Chap 5** **Note: It actually goes to Escrow(Title)**

Question 53

**When a Buyer's Interest in a Purchase Contract is Assigned to a Third Party, the Seller's Permission:** 1. Is Always Required 2. Is Never Required 3. Must be Obtained At time of Listing the Property 4. May be Required

Answer 53

**When a Buyer's Interest in a Purchase Contract is Assigned to a Third Party, the Seller's Permission:** 1. Is Always Required 2. Is Never Required 3. Must be Obtained At time of Listing the Property 4. **May be Required** **Chap 5** **Note: Contract May Prohibit**