Real Estate Contracts & Agency 3

Question 1

A purchase and sale agreement becomes binding when:

Accepted Answer

Both parties sign and communication of acceptance is received

Answer

The buyer signs it

Answer

The earnest money clears the bank

Answer

The title company is notified

Question 2

'Time is of the essence' in a real estate contract means:

Accepted Answer

All deadlines in the contract are strictly binding

Answer

The property must close quickly

Answer

The agent must respond within 24 hours

Answer

Inspections must be done immediately

Question 3

A right of first refusal gives a party the:

Accepted Answer

Opportunity to match any offer before the property is sold to another

Answer

Right to set the listing price

Answer

Right to purchase at a discount

Answer

Right to inspect before listing

Question 4

Assignment of a real estate contract transfers the:

Accepted Answer

Contractual rights and obligations to a third party

Answer

Title to the property

Answer

Listing to another broker

Answer

Mortgage to a new lender

Question 5

A bilateral contract in real estate is one where:

Accepted Answer

Both parties make promises to each other

Answer

Only one party makes a promise

Answer

The government is involved

Answer

No consideration is exchanged

Question 6

Liquidated damages in a real estate contract are:

Accepted Answer

A pre-agreed amount payable upon breach, often the earnest money

Answer

Court-awarded punitive penalties

Answer

Broker commissions owed at default

Answer

Funds held in escrow for repairs