A buyer makes an earnest money deposit of $10,000 on a $300,000 property and then withdraws her offer before the seller can accept it. The broker is
... [Show More] responsible for disposing of the earnest money by
A turning it over to the seller.
B deducting the commission and giving the balance to the seller.
C returning it to the buyer.
D depositing it in his or her trust account.
Correct Answer C
A contract only exists when it is both offered by the buyer and accepted by the seller. Since the second part of this requirement was never fulfilled, the buyer is entitled to have his earnest money returned.
Broker K arrives to present a purchase offer to Mrs. D, an 80 year old invalid who is not always of sound mind, and finds her son and her daughter-in-law present. In the presence of Broker K, both individuals persistently urge D to accept the offer, even though it is much lower than the price she has been asking for her home. If D accepts the offer, she may later claim that
A- broker K should not have brought her such a low offer for her property.
B- she was under undue duress from her son and daughter-in-law, and, therefore, the contract is voidable.
C- broker K defrauded her by allowing her son and daughter-in-law to see the purchase offer he brought to her.
D- her consumer protection rights have been usurped by her son and daughter-in-law.
Correct Answer B
"Duress" is the application of coercion or pressure to influence a person to act in a way contrary to his/her best interests. Further, since voluntary participation is a key condition of any contract, Mrs. D could well be successful in such an action. A voidable contract is one that is able to be voided because Mrs D was under duress or undue influence.
A breach of contract is a refusal or a failure to comply with the terms of the contract. If the seller breaches the purchase contract, the buyer may do all of the following EXCEPT
A sue the seller for specific performance.
B rescind the contract and recover the earnest money.
C sue the seller for damages.
D sue the broker for non-performance.
Correct Answer D
While brokers and salespeople are responsible for bringing people together, they cannot be expected to know every detail of their circumstances or intent. Thus, if a buyer cannot get clear title or a seller is unexpectedly transferred, it is not the broker's fault the transaction failed and he or she bears no responsibility or liability.
A broker and seller terminate the listing contract. An offer is received in the mail by the broker after the termination of the listing contract. The offer is for full price and includes all of the terms and conditions of the seller. Why is this NOT a valid contract?
A There is no consideration involved.
B No acceptance has been given.
C No earnest money has been enclosed.
D There is no current listing agreement.
Correct Answer B
It has not been presented to or accepted by the owner. Remember, contracts aren't valid until both parties agree. However, even though the listing agreement has expired, the offer should be presented. If it's accepted and the transaction closes, the broker will generally be entitled to his or her full commission.
A buyer bought a property without telling the seller of his intended purpose for the property. The contract contains no contingency clauses and it is a properly closed. After the closing, the buyer is unable to obtain the zoning he needs for his commercial project. What is the contract at this stage?
A Void
B Executed but Voidable
C In Breach
D Executed and Enforceable
Correct Answer D
If the buyer bought the property and did not explain the purpose of their purchase (to include zoning or restrictions which may be on the deed), the purchase and sale contract are both executed (after the closing) and enforceable (which means within the legal requirements).
A home improvement company was negotiating with a homeowner to add on two rooms to a home. The company agreed to take a second mortgage as long as the homeowner also included the rest of the property in the loan. The company and the homeowner agreed to a price and the company provided the necessary disclosure form on Monday and the homeowner signed the agreement at noon the following day. Assuming that the week had five business days, until what time could the homeowner rescind the loan?
A Tuesday, midnight
B Thursday, midnight
C Friday, midnight
D There is no rescission on a house.
Correct Answer C
Because agreement was reached and SIGNED documents were provided on TUESDAY, Friday midnight ends the THREE-business-day period
The amount of earnest money deposit is determined by [Show Less]