1. An option to purchase contract binds which of the following?
A. Seller only
B. Buyer only
C. Neither the buyer nor the seller
D. Both the buyer and the seller
2. The seller is selling his property to a buyer with seller financing. The seller will keep the title in his name until the property is paid in full. The seller in this type of sale is called the:
A. Vendee
B. Escrow facilitator
C. Purchase Money Mortgage
D. Vendor
3. The seller is selling his property to a buyer with seller financing. The seller will keep the title in his name until the property is paid in full. What kind of contract is this called?
A. Contact for deed
B. Land contract
C. Installment contract
D. All of the above
4. A real estate agent/broker is responsible for keeping the client informed of all the facts that could affect the sales transaction. This is a duty of:
A. Care C. Disclosure
B. Loyalty D. Obedience
5. Does a counter proposition enjoy the same rights of withdrawal (before acceptance) as the original offer to purchase?
A. Yes, it is a new offer C. Only after 3 days
B. No, it was rejected by the seller D. Only after 5 days
6. Mary just listed her neighbor’s property. What kind of contract does her brokerage have with them?
A. Listing agreement C. Contract for deed
B. Buying agreement D. Installment contract
7. Who are the principal parties in an agreement for deed sale?
A. Seller and Buyer C. Both A and B
B. Vendor and Vendee D. Neither A and B
8. If a date is omitted in a contract, is it invalid?
A. Statutes of Fraud require a date to be a valid contract
B. No, a date is not one of the essential elements for a valid contract
C. Yes because a date is one of the essential elements that makes a contract valid
D. Yes, if it is omitted it gives way for the other party to void the contract
9. Does the term ‘valuable consideration” mean only a money consideration?
A. Yes, at least 5% of the purchase price must be put down as earnest money
B. Yes, but the amount is always negotiable between the seller and the buyer
C. No, anything of value can be put down as earnest money as long as both parties agree to it.
D. Yes because the more money that is put down by the buyer, the more likely the seller will accept his offer.
10. When a buyer or seller default on the contract, what steps could each take?
A. Liquidated damages C. Could agree to cancel without damages
B. Specific performance D. All of the above