FREE Real Estate Sales Real Estate Contracts Questions and Answers Flashcards

A buyer signs a purchase agreement but the seller never signs it. What is the status of this transaction?

Answer: No valid contract exists

A contract requires acceptance by all parties, and without the seller's signature there is no mutual agreement.

Which clause in a real estate contract allows a buyer to cancel if they cannot secure financing by a specified date?

Answer: Financing contingency

A financing contingency protects the buyer by allowing contract termination if they fail to obtain a mortgage commitment by the deadline.

What is the legal effect of an 'as-is' clause in a residential purchase contract?

Answer: The seller will not make repairs but must still disclose known defects

An as-is clause means the seller will not make repairs, but most states still require disclosure of known material defects.

In a land contract (contract for deed), when does the buyer typically receive legal title?

Answer: When all payments under the contract are completed

In a contract for deed, the seller retains legal title until the buyer fulfills all payment obligations under the agreement.

Which of the following would make a real estate contract voidable rather than void?

Answer: A contract signed by a 17-year-old

A contract signed by a minor is voidable because the minor may choose to disaffirm or ratify it upon reaching the age of majority.

What does the 'time is of the essence' clause establish in a real estate purchase contract?

Answer: Deadlines in the contract are strictly enforceable and failure to meet them is a material breach

A time is of the essence clause makes all stated deadlines firm, and missing them constitutes a breach that may allow the other party to terminate.