The Statute of Frauds requires real estate contracts to be in writing to be enforceable. The Statue of Limitations sets time limits on particular actions. The Law of Agency governs the relationship between an agent and a client. The Sherman Anti-Trust Act was passed to prohibit monopolies. In real estate the effect of this law is that commissions are negotiable, notfixed or standard.28. A buyer has defaulted on a sales contract. The seller has agreed to keep the earnest money deposit as compensation. What remedy has the seller agreed to?Liquidated damagesPartial performanceSuit for specific performanceMoney damagesCorrect answer: aDamages established in the contract are called liquidated damages. Our contracts state that if the buyer defaults, the seller can keep the deposits. There is no partial performance in a sales contract - the property is sold, or not sold. The seller is not suing the buyer to force the buyer to perform or buy the property. Money damages are actual and punitive and require a lawsuit.29. A listing agreement is:A bilateral contractTerminated by the death of the listing agentAn employment contractA conveyanceCorrect answer: cThe listing agreement employs the broker to try to find a buyer for the seller. If the broker sells the property, then the seller will pay a commission. This is a unilateral contract. It is terminated by the death of the broker, or the seller, not the death of the salesperson.31. What real estate contract is an exception to the Statute of Frauds?A lease for one year or lessAn option contract
A listing contractA buyer representation agreementCorrect answer: aA lease for one year or less is the exception to the Statute of Frauds.37. Many states require a seller's disclosure of property condition. Which statement about a seller's disclosure is FALSE?A broker is responsible for discovering and disclosing all problems in areas accessible for visual inspectionA broker's role is to encourage honesty and full disclosure by the sellerA broker is not liable for hidden defects not disclosed by the sellerBoth the broker and the seller are responsible for the accuracy of the disclosure formCorrect answer: dThe seller is responsible for the accuracy of the disclosure. The broker is responsible for discovering and disclosing all problems in areas accessible for visual inspection. His role with the disclosure is to encourage honesty and full disclosure. The broker is not liable for hidden defects not disclosed by the seller.38. Which of the following statements about radon is false?Radon is colorless and odorlessHUD does not require radon testing for FHA loansRadon is only harmful to individuals who smoke or have lung diseaseRadon enters homes through their foundationsCorrect answer: cRadon is harmful to all. Radon is colorless and odorless and enters homes through the foundation. HUD does not require radon testing for FHA loans.
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