CHAPTER 4 QUIZ

1. The amount of earnest deposit is determined by:

2. The term ‘rescind” means:

3. A broker has found a buyer for a seller’s home. The buyer has indicated in writing his willingness to buy the property for $1,000 less than the asking price and has deposited $5,000 in earnest money with the broker. The Seller is out of town for the weekend, and the broker has been unable to inform him of the signed document. At this point, the buyer has signed a (n):

4. Which one of the following is NOT essential to the formation of a contract?

5. Harry agrees to purchase Victoria’s real estate for $230,000, and deposits $86,900 earnest money with Broker Larry. However, Victoria is unable to clear the title to the property, and Harry demands the return of his earnest money as provided in the purchase contract. Broker Larry should:

6. Every real estate contract must have a(n):

7. A broker took a listing and later discovered that the client was legally incompetent and had been living in a mental institution for many years, believing himself to be President Taft. The listing is now:

8. After the buyer and seller have signed a sales contract, the seller changes his mind and defaults. The buyer sues the seller to force him to go through with the contract. This is known as a suit for:

9. An offeree has the right to __________ an offer.

10. Under the statute of frauds, all contracts for the sale of real estate must be:

11. On Tuesday, broker Loren received a $750 earnest money deposit from Gus. The seller accepted the offer on Thursday. Where and when must Loren deposit Gus’s money?

12. A void contract is one that is:

13. The legal proceeding or legal action brought by the buyer under a purchase contract to enforce the terms of the contract is known as:

14. The essential elements of a contract include all of the following EXCEPT:

15. If, upon the receipt of an offer to purchase his property under certain conditions, the seller makes a counteroffer, the prospective buyer is:

16. A buyer defaulted some time ago on a written contract to purchase a seller’s real estate. Can the seller sue for damages?

17. Which of the following gives the best evidence of the buyer’s intention to carry out the terms of the real estate purchase contract?

18. A real estate licensee may draft a contract:

19. An option:

20. When a prospective buyer makes a written purchase offer that the seller accepts, then the:

21. A bilateral contract is one in which:

22. The law that requires real estate contracts to be in writing to be enforceable is the:

23. If an owner takes his property off the market for a definite period of time in exchange for some consideration, but he grants the right to purchase the property within that period for a stated price, this is called a(n):

24. A breach of contract is a refusal or a failure to comply with the terms of the contract. If the seller breaches the purchase contract, the buyer may do all of the following EXCEPT:

25. To assign a contract for the sale of real estate means to:

26, None of the following are essential to a real estate contract EXCEPT:

27. Two salespeople working for the same broker obtained offers on a property listed with their firm. The first offer was obtained early in the day. A second offer for a higher purchase price was obtained later in the afternoon. The broker presented the first offer to the seller that evening. The broker did not inform the seller about the second offer so that the seller could make a decision about the first offer. Which of the following is true?

28. A broker has an exclusive right-to-sell listing on a building. The owner is out of town when the broker gets an offer from a buyer to purchase the building providing the seller agrees to take a purchase money mortgage. The buyer must have a commitment from the seller before the seller is scheduled to return to the city. Under these circumstances, the:

29. On Monday the seller offers to sell his vacant lot to the buyer for $112,000. On Tuesday, the buyer counteroffers to buy for $110,500. On Friday the buyer withdraws the counteroffer and accepts the original offer of $112,000. Under these conditions:

30. In an option to purchase real estate, the optionee:

31. The broker receives an earnest money deposit with a written offer to purchase that includes a ten-day acceptance clause. On the fifth day, before the offer is accepted, the buyer notifies the broker that she is withdrawing the offer and demands the return of the earnest money deposit. In this situation:

32. At the time a buyer was negotiating the purchase of a lot on which to build a new home, the seller represented that the soil was firm enough to support the construction of a building. In fact, the seller knew that any new construction would very likely sink up to fifteen feet below the surface. This contract is:

33. After the buyer and seller have signed a sales contract, the seller has a change of heart and defaults. The buyer sues the seller. Is this action legal?

34. All of the following are false regarding the acceptance of an offer EXCEPT:

35. A contract agreed to under duress is:

36. A real estate sales contract becomes valid or in effect when it has been signed by:

37. All of the following will terminate an offer EXCEPT:

38. If a broker deposits the buyer’s earnest money in a trust account, at what time is the seller entitled to receive it?

39. Which of the following best describes a contract that is voidable?

40. Of the following, who would have equitable title to property?

41. What is the status of an option contract that has been exercised?

42. All of the following are false regarding the status of a sales contract EXCEPT:

43. At what age is an Illinois resident considered to be of legal age?

44. In Illinois, a deed or contract executed on a Sunday or legal holiday is:

45. Broker Hannah is about to present a form contract to her client. The contract is intended to become a binding real estate contract as soon as the client signs it. How must the contract be headed, under Illinois law?

46. Under the administrative rules all brokers must:

47. A buyer and a seller sign a binding sales agreement. Three days before closing, the property is destroyed by a tornado. Under Illinois law, which of the following is true?