CTC Contract Review & Risk Management 5

Question 1

Which practice best reduces a brokerage's exposure in an errors-and-omissions claim involving a transaction file?

Accepted Answer

Maintaining a complete, chronological file with all versions, signatures, and communications

Answer

A complete, organized record is the strongest defense when a transaction is later disputed.

Question 2

The appraisal comes in $15,000 below the contract price and the contract has an appraisal contingency. Which is NOT typically one of the parties' options?

Accepted Answer

The TC orders a new appraisal to override the lender's valuation

Answer

The TC has no authority to override a lender appraisal; the parties resolve the gap by negotiation or termination.

Question 3

A party signs the contract under a power of attorney. What should the TC verify?

Accepted Answer

That the POA is valid, covers real estate transactions, and is acceptable to title and the lender

Answer

Title companies and lenders must approve the POA, and it must grant authority for the real estate transaction.

Question 4

Under RESPA Section 8, which arrangement is prohibited?

Accepted Answer

Giving or receiving a kickback for referring settlement service business

Answer

RESPA Section 8 bans kickbacks and unearned fees for referrals of settlement services.

Question 5

The buyer's inspection objection notice is delivered one day after the contract's inspection deadline. What is the most likely consequence under a typical contract?

Accepted Answer

The buyer may be deemed to have accepted the property's condition or waived the objection right

Answer

Missing a contingency deadline often results in a deemed waiver of that contingency.

CTC - Certified Transaction Coordinator Practice Test

CTC - Certified Transaction Coordinator Practice Test

CTC Contract Review & Risk Management 5