Real Estate Sales Real Estate Contracts Questions and Answers Flashcards

A buyer submits an offer that changes the price in the seller's original offer. Under contract law, this is considered which of the following?

Answer: A counteroffer

Changing any term of the original offer creates a counteroffer, which terminates the original offer.

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

Answer: Financing contingency clause

A financing contingency clause lets the buyer exit the contract without penalty if they fail to secure a loan by the deadline.

In a bilateral contract for the sale of real estate, which of the following best describes the obligations of the parties?

Answer: Both parties exchange binding promises to perform

A bilateral contract involves mutual promises where both the buyer and seller are obligated to perform.

When a seller accepts an offer but adds a requirement that closing must occur 10 days earlier than proposed, what has the seller created?

Answer: A counteroffer

Adding or changing any term in the acceptance converts it into a counteroffer rather than an acceptance.

A real estate purchase contract states that 'time is of the essence.' What does this phrase mean?

Answer: Deadlines in the contract are strictly enforceable

'Time is of the essence' means all dates and deadlines in the contract are firm and failure to meet them may constitute a breach.

Which of the following is required for a real estate sales contract to be enforceable under the Statute of Frauds?

Answer: A written agreement signed by the party to be charged

The Statute of Frauds requires real estate contracts to be in writing and signed by the party against whom enforcement is sought.