FINC 371 UPDATED FINAL EXAM QUESTIONS
AND ANSWERS SURE A+
✔✔A typical sales contract would state all of the following EXCEPT
A. the right of first refusal.
B. disposition of the earnest money.
C. conditioning upon the buyer obtaining financing.
D. purchase price. - ✔✔A
✔✔Which of the following is required for an option to buy contract to be binding?
a. The property owner must give the buyer some consideration for the option.
b. The property owner must pay the buyer a small fee to bind the buyer.
c. A specific day to exercise the option must be established.
d. All of the above - ✔✔C
✔✔Suppose Chuck and Barbara agree to purchase a vacant lot from Steve, the legal
owner. Two days later, Steve's father calls and informs them that Steve has changed
his mind, as many precocious 16-year olds are apt to do. At the time the contract was
signed, Steve did not reveal his age. What are Chuck and Barbara's options?
a. Sue Steve on the basis of specific performance
b. Accept Steve's decision and look for another property
c. Sue Steve for breach of contract
,d. Sue Steve's father for breach of contract - ✔✔B
✔✔Suppose John offers to buy Peggy's real estate for $100,000. Peggy isn't sure if she
wants to accept his offer. John decides to give her a week to think it over. The next day,
Peggy has still not made up her mind and John has found another property he would
rather buy. Can John withdraw his offer to Peggy without penalty?
a. No, not if the property involved is residential real estate
b. Yes, but only if the property involved is residential real estate
c. No
d. Yes - ✔✔D
✔✔Suppose you want to secure the right to purchase a particular parcel of vacant land
on a specified date in the future at a fixed price. You are willing to pay $5,000 for this
right. But, you don't want to feel obligated to purchase the property if you change your
mind prior to the specified date. What kind of contract should you use?
a. Option-to-buy contract
b. Sales contract
c. Contract for deed
d. Land contract - ✔✔A
✔✔Generally, the seller of a single-family residence pays which closing costs?
a. The brokerage commission and the deed preparation costs
b. The lender's inspection fee and the brokerage commission
c. The brokerage commission and the discount points
d. The appraisal fee and the recording fees - ✔✔A
✔✔Which of the following is NOT considered to be a buyer's responsibility in bringing a
real estate transaction to completion?
a. Obtaining a title opinion
b. Obtaining financing
c. Removal of all encumbrances
d. Having the property surveyed - ✔✔C
✔✔Do real estate sales contracts transfer ownership of real estate between the parties?
What does? - ✔✔No, Deed
✔✔the document that conveys ownership of real estate - ✔✔deed
✔✔When a _____ ________ is made, it becomes binding for both parties. The seller
must sell to the buyer and the buyer must buy from the seller. - ✔✔sales contract
, ✔✔In an _____________ contract, it is only binding for the seller. The seller must only
sell to the buyer, but the buyer has an option to buy from the seller. However, in order to
obtain an _____________ contract, the buyer would likely have to pay the seller some
form of consideration. - ✔✔option-to-buy
✔✔From the buyer's perspective, the most important thing that happens at a typical real
estate closing is the transfer of ________ _____ (ownership) from the seller to the
buyer. - ✔✔property title
✔✔The contract that defines the relationship between the property owner and the real
estate broker is the - ✔✔listing agreement
✔✔The listing is the written agreement between
A. a property owner and a real estate broker.
B. a buyer and a real estate broker.
C. a property owner and a real estate sales associate.
D. a property owner and a real estate employee. - ✔✔A
✔✔Which of the following statements is not true about brokers?
a. Brokers take ownership of the item being transferred for a least a brief moment in
time.
b. Brokers often specialize in certain property types.
c. Brokers receive compensation in the form of commission for their services.
d. Brokers assist in negotiating agreements between buyers and sellers. - ✔✔A
✔✔A state license is required for anyone who
A. both
B. sells their own property.
C. sells property for other people.
D. none of the above - ✔✔C
✔✔In the legal relationship known as "agency," the __ is authorized by the _______ to
transact business on his or her behalf.
A. seller, broker
B. principal, agent
C. agent, principal
AND ANSWERS SURE A+
✔✔A typical sales contract would state all of the following EXCEPT
A. the right of first refusal.
B. disposition of the earnest money.
C. conditioning upon the buyer obtaining financing.
D. purchase price. - ✔✔A
✔✔Which of the following is required for an option to buy contract to be binding?
a. The property owner must give the buyer some consideration for the option.
b. The property owner must pay the buyer a small fee to bind the buyer.
c. A specific day to exercise the option must be established.
d. All of the above - ✔✔C
✔✔Suppose Chuck and Barbara agree to purchase a vacant lot from Steve, the legal
owner. Two days later, Steve's father calls and informs them that Steve has changed
his mind, as many precocious 16-year olds are apt to do. At the time the contract was
signed, Steve did not reveal his age. What are Chuck and Barbara's options?
a. Sue Steve on the basis of specific performance
b. Accept Steve's decision and look for another property
c. Sue Steve for breach of contract
,d. Sue Steve's father for breach of contract - ✔✔B
✔✔Suppose John offers to buy Peggy's real estate for $100,000. Peggy isn't sure if she
wants to accept his offer. John decides to give her a week to think it over. The next day,
Peggy has still not made up her mind and John has found another property he would
rather buy. Can John withdraw his offer to Peggy without penalty?
a. No, not if the property involved is residential real estate
b. Yes, but only if the property involved is residential real estate
c. No
d. Yes - ✔✔D
✔✔Suppose you want to secure the right to purchase a particular parcel of vacant land
on a specified date in the future at a fixed price. You are willing to pay $5,000 for this
right. But, you don't want to feel obligated to purchase the property if you change your
mind prior to the specified date. What kind of contract should you use?
a. Option-to-buy contract
b. Sales contract
c. Contract for deed
d. Land contract - ✔✔A
✔✔Generally, the seller of a single-family residence pays which closing costs?
a. The brokerage commission and the deed preparation costs
b. The lender's inspection fee and the brokerage commission
c. The brokerage commission and the discount points
d. The appraisal fee and the recording fees - ✔✔A
✔✔Which of the following is NOT considered to be a buyer's responsibility in bringing a
real estate transaction to completion?
a. Obtaining a title opinion
b. Obtaining financing
c. Removal of all encumbrances
d. Having the property surveyed - ✔✔C
✔✔Do real estate sales contracts transfer ownership of real estate between the parties?
What does? - ✔✔No, Deed
✔✔the document that conveys ownership of real estate - ✔✔deed
✔✔When a _____ ________ is made, it becomes binding for both parties. The seller
must sell to the buyer and the buyer must buy from the seller. - ✔✔sales contract
, ✔✔In an _____________ contract, it is only binding for the seller. The seller must only
sell to the buyer, but the buyer has an option to buy from the seller. However, in order to
obtain an _____________ contract, the buyer would likely have to pay the seller some
form of consideration. - ✔✔option-to-buy
✔✔From the buyer's perspective, the most important thing that happens at a typical real
estate closing is the transfer of ________ _____ (ownership) from the seller to the
buyer. - ✔✔property title
✔✔The contract that defines the relationship between the property owner and the real
estate broker is the - ✔✔listing agreement
✔✔The listing is the written agreement between
A. a property owner and a real estate broker.
B. a buyer and a real estate broker.
C. a property owner and a real estate sales associate.
D. a property owner and a real estate employee. - ✔✔A
✔✔Which of the following statements is not true about brokers?
a. Brokers take ownership of the item being transferred for a least a brief moment in
time.
b. Brokers often specialize in certain property types.
c. Brokers receive compensation in the form of commission for their services.
d. Brokers assist in negotiating agreements between buyers and sellers. - ✔✔A
✔✔A state license is required for anyone who
A. both
B. sells their own property.
C. sells property for other people.
D. none of the above - ✔✔C
✔✔In the legal relationship known as "agency," the __ is authorized by the _______ to
transact business on his or her behalf.
A. seller, broker
B. principal, agent
C. agent, principal
