The Principles of Real Estate: Sale Agreement Chpt 11 Flashcards

The Principles of Real Estate: Sale Agreement (Chpt 11) Flashcards

Which statement regarding an earnest money deposit is FALSE?- It should always be delivered to the seller at the time the offer is presented.- It can be a promissory note, check, cash, or other item of value.- It can be held until an agreement has been reached by the parties if so agreed to in the purchase and sale agreement.- It must be deposited within 3 business days of agreement if being held uncashed as agreed until a contract has been reached.It should always be delivered to the seller at the time the offer is presented.The purchase and sale agreement allows the buyer to deliver the earnest money deposit after the offer has been accepted by the seller.Which statement is FALSE with respect to writing a contingency?- The contingency should be specifically stated, including the time within which it must be fulfilled.- It is not necessary to specify the time within which the contingency is to be fulfilled.- It is important to specify if silence on the part of the party claiming the benefit of the contingency is to be treated as approval or disapproval of the contingency.- It is important to specify whether the contingency can be waived by the buyer, seller, or both It is not necessary to specify the time within which the contingency is to be fulfilled.If no specific time is stated for the satisfaction or waiver of the contingency, then a reasonable time for the nature of the contingency can be determined by a court. To avoid this situation, every contingency should have a deadline.The standard purchase and sale agreement does NOT

obligate the seller to deliver the property to the buyer:- with

the seller's hazard insurance in place for up to thirty days after closing.- free of all debris and personal property not included in the sale.- subject to inspection rights, in the same physical condition as the date of acceptance.- maintained in the condition as viewed by buyer.with the seller's hazard insurance in place for up to thirty days after closing.The seller will deliver the property to the buyer, subject to inspection rights, in the same physical condition as the date of acceptance, maintain the property in the same condition as viewed by the buyer, and deliver the property free of all debris and personal property not included in the sale.In a purchase and sale agreement, the dates specified in

the contract:- can only be extended by written agreement of

all the parties to the contract.- are not absolute, and failure to perform by the date specified is a breach of the contract.- mean that the party to perform by the date specified must do so within a reasonable time of that date.- are not affected by the "time is of the essence" clause in the contract.can only be extended by written agreement of all the parties to the contract.The purchase and sale agreements contain a time is of the essence clause, thereby requiring licensees to be diligent in keeping track of the time frames of the contract and ensuring that the terms and contingencies in the agreement are met by the dates specified or extended by written agreement of the parties when necessary.If the transfer of title and the delivery of occupancy to the buyer do not occur at the same time, it is important for

licensees to advise the parties that:- it is not necessary to

consult insurance and legal professionals if occupancy will occur within 6 months of closing.- it is illegal for possession to occur prior to transfer of title.- a separate written agreement needs to be executed.a separate written agreement needs to be executed.If occupancy do not occur at the same time as the transfer of title, a written agreement and the consultation of insurance and legal professionals is recommended.

The real estate purchase and sales agreement:- awards

attorney fees to the prevailing party in the event of any

proceeding arising from the real estate agreement.- contains a "time is of the essence" clause, making the dates in the contract absolute.- provides for the escrow holder to withhold taxes in compliance with the Foreign Investment in Real Property Tax Act, if applicable.- All of the above All of the above.The real estate purchase and sale agreement contains a paragraph regarding attorney fees ,

a "time is of the essence" clause, and a withholding taxes disclosure.The standard form purchase agreement does NOT require the seller to perform which one of the following with regard to repairs?- Prepare a written statement indicating any repair performed by the seller and the date of such repair- Obtain receipts for repairs performed by others- Provide copies of receipts and statements to the buyer prior to final verification of condition- Have the property reinspected by the buyer's original inspector Have the property reinspected by the buyer's original inspectorThe seller shall(1) obtain receipts for repairs made by others;(2) prepare a written statement indicating the repairs performed by the seller and the date of such repairs; and(3) provide copies of receipts and statements to the buyer prior to final verification of condition.Once an agreement has been reached, the person for

whom a contingency has been inserted cannot:- agree to

perform the balance of the contract even though the contingency has not been satisfied.- refuse to exert due diligence to cause the contingency to be satisfied within the time specified in the contract.refuse to exert due diligence to cause the contingency to be satisfied within the time specified in the contract.In many situations where an unfilled contingency exists, the courts will force the ripening of a contract duty to perform. This result is reached in cases where the court has found that the party benefiting from the condition had a duty to use reasonable due diligence to see that the condition occurred and failed to do so.Which one of the following would NOT constitute the unauthorized practice of law by a real estate licensee?- Giving advice as to the implications of legal documents or particular clauses within those documents.- Filling in blanks on a purchase and sale agreement per the instructions of a client wishing to make an offer on a property.- Giving advice on how a client should take title to a property being purchased.- Rendering opinions on the tax implications of a 1031 exchange.Filling in blanks on a purchase and sale agreement per the instructions of a client wishing to make an offer on a property.There are certain activities that are clearly the practice of law, which a licensee should never engage in.These activities include the giving of tax advice, rendering opinions on the tax implications of a 1031 exchange, giving counsel as to the legal meaning of legal documents or phrases within that document, rendering advice as to how title should be taken, and other advice that affects legal rights or duties.Real estate licensees are permitted to fill in blanks in printed, standardized forms in connection with transactions handled in the usual course of business.Therefore, a real estate licensee can fill in the blanks of a purchase and sale agreement, a promissory note for earnest money, rental agreements, and most lease agreements.Which statement is FALSE regarding a contingency in a sales agreement?- If unfulfilled, they can terminate any further contractual obligation of one of the parties to the agreement.- With real estate transactions, contingencies are rare and seldom used in real estate sale agreements.- They may be prepared by a licensee at the request of a client without being in violation of the unauthorized practice

of law.- Contingencies can be defined as any event where the happening or non-happening of which may modify or terminate the sale agreement.With real estate transactions, contingencies are rare and seldom used in real estate sale agreements.A condition is any event where the happening (or non-happening) may limit, modify, or terminate contractual obligations. With real estate transactions, conditions and contingencies are a part of almost every real estate sale agreement.