RES Real Estate Contracts & Transactions

Question 1

What are the essential elements of a valid real estate contract?

Accepted Answer

Competent parties, mutual assent, lawful objective, and consideration

Answer

Only a written signature

Answer

Verbal agreement and a handshake

Answer

Notarization and recording

Question 2

What is earnest money in a real estate transaction?

Accepted Answer

A deposit made by the buyer to demonstrate serious intent to purchase the property

Answer

The final payment at closing

Answer

A fee paid to the listing agent

Answer

A tax assessed on property transfers

Question 3

What is a contingency in a real estate purchase agreement?

Accepted Answer

A condition that must be met before the contract becomes binding, allowing the buyer to withdraw without penalty if unsatisfied

Answer

A guaranteed closing date

Answer

A type of property insurance

Answer

A penalty for breaking the contract

Question 4

What is the Statute of Frauds and how does it apply to real estate?

Accepted Answer

A law requiring certain contracts, including those for real property, to be in writing to be enforceable

Answer

A law prohibiting fraud in property advertising

Answer

A criminal statute for real estate scams

Answer

A law requiring property inspections

Question 5

What is a title search and why is it important?

Accepted Answer

An examination of public records to verify the seller's legal ownership and identify any encumbrances on the property

Answer

A search for the property's street address

Answer

An inspection of the building's structural integrity

Answer

A review of neighborhood crime statistics

Question 6

What happens at a real estate closing?

Accepted Answer

Title transfers from seller to buyer, funds are disbursed, documents are signed, and the transaction is recorded

Answer

The buyer makes their first offer on the property

Answer

The property is listed on the market

Answer

The home inspection takes place