Real Estate Contract Creation and Contingencies
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Questions and Answers

What is the role of unqualified acceptance in the creation of a contract?

  • It voids the contract
  • It secures the deposit amount
  • It grants the seller equitable title
  • It gives the buyer equitable title (correct)

    • What is the purpose of a deposit in a real estate contract?

  • To secure the validity of the contract and the buyer's interest (correct)
  • To determine the expiration date of the contract
  • To secure the validity of the contract and the seller's interest
  • To define contingencies

    • What do contingencies refer to in a real estate contract?

  • Liquidated damages claimed by the seller
  • Conditions that must be met before enforcing the contract (correct)
  • Specific performance obligations
  • The expiration date of the contract

    • What options does a seller have in case of a buyer default?

    <p>Cancelling the contract, claiming liquidated damages, or suing for specific performance</p> Signup and view all the answers

    What recourse does a buyer have in case of a seller default?

    <p>Cancelling or suing for damages or specific performance</p> Signup and view all the answers

    Who controls the deposit in a real estate contract?

    <p>A disinterested party in accordance with escrow instructions</p> Signup and view all the answers

    What is one of the primary clauses that should be included in a contract for sale?

    <p>Earnest Money</p> Signup and view all the answers

    In a contract for deed, what happens at the end of the term?

    <p>Buyer pays off remaining balance and obtains legal title</p> Signup and view all the answers

    What is an important consideration in a contract option?

    <p>How to exercise an option</p> Signup and view all the answers

    What recourse do buyers have in case of default in a contract for deed?

    <p>Buyer may sue for cancellation and damages</p> Signup and view all the answers

    Which document should be included to ensure the validity of a contract for sale?

    <p>Valuable Consideration and Signatures</p> Signup and view all the answers

    In a contract option, what happens if exercised by the optionee?

    <p>The option becomes a bilateral sales contract</p> Signup and view all the answers

    What is the function of contingencies in a real estate contract?

    <p>To ensure the validity of the contract</p> Signup and view all the answers

    In a real estate contract, what does unqualified acceptance of an offer by the buyer result in?

    <p>Enforcement of specific performance</p> Signup and view all the answers

    What is the purpose of earnest money escrow in a real estate contract?

    <p>To secure the validity of the contract and buyer's interest</p> Signup and view all the answers

    If a buyer defaults on their obligations under a real estate contract, what can a seller do?

    <p>Claim liquidated damages or enforce specific performance</p> Signup and view all the answers

    What happens if a seller defaults on their obligations under a real estate contract?

    <p>The buyer may sue for damages or specific performance</p> Signup and view all the answers

    Who controls the deposit in a real estate contract and is obligated to follow escrow instructions?

    <p>A disinterested party</p> Signup and view all the answers

    What is a key feature of an executory contract?

    <p>Must be fulfilled</p> Signup and view all the answers

    What is an essential element that should be included in a contract for deed?

    <p>Title Evidence</p> Signup and view all the answers

    In a contract option, what is the purpose of recording the option?

    <p>To make the option legally binding</p> Signup and view all the answers

    What is an important right that the buyer has in a contract for deed?

    <p>The right to use, possess, or profit from the property</p> Signup and view all the answers

    What recourse does a seller have in case of buyer default in a contract for deed?

    <p>Pursue litigation for specific performance or damages</p> Signup and view all the answers

    What does a non-refundable consideration for an option in a contract signify?

    <p>It confirms the buyer's commitment to purchase within the option period.</p> Signup and view all the answers

    What must be fulfilled in an executory contract?

    <p>Legal enforceability</p> Signup and view all the answers

    In a contract for deed, what is the buyer responsible for during the term of the agreement?

    <p>Maintaining upkeep of the property</p> Signup and view all the answers

    What is an important provision in a contract for sale to ensure its validity?

    <p>Legal description</p> Signup and view all the answers

    What is a common clause provision in a contract option?

    <p>Forfeiture of option money</p> Signup and view all the answers

    In a contract for sale, what does 'primary clauses' typically refer to?

    <p>Options and essentials</p> Signup and view all the answers

    What happens if an option in a real estate contract is exercised by the optionee?

    <p>The option becomes a bilateral sales contract</p> Signup and view all the answers

    What must be met before a contract can be enforced?

    <p>Contingencies</p> Signup and view all the answers

    Which party controls the deposit in a real estate contract?

    <p>Escrow agent</p> Signup and view all the answers

    What does a buyer gain with unqualified acceptance of an offer?

    <p>Power to enforce specific performance</p> Signup and view all the answers

    In a real estate contract, what is the purpose of the buyer's deposit?

    <p>Ensuring validity of the contract</p> Signup and view all the answers

    If a buyer defaults on obligations under a contract, what can a seller do?

    <p>Claim liquidated damages</p> Signup and view all the answers

    What happens if a seller defaults on their obligations under a real estate contract?

    <p>Buyer may cancel the contract or sue for damages</p> Signup and view all the answers

    What does unqualified acceptance of an offer in a contract result in for the buyer?

    <p>Gaining equitable title and the ability to seek specific performance</p> Signup and view all the answers

    What is the primary purpose of having contingencies in a real estate contract?

    <p>To ensure certain conditions are met before enforcement</p> Signup and view all the answers

    If a seller defaults on obligations under a real estate contract, what recourse does the buyer have?

    <p>Cancel the contract or sue for damages</p> Signup and view all the answers

    What is the function of earnest money escrow in a real estate contract?

    <p>To secure the validity of the contract and buyer's interest</p> Signup and view all the answers

    What role does a disinterested party play in a real estate transaction?

    <p>Handle the deposit and follow escrow instructions impartially</p> Signup and view all the answers

    In a real estate contract, what happens if a buyer defaults on their obligations?

    <p>The seller has options like claiming liquidated damages or suing for specific performance</p> Signup and view all the answers

    What is a primary clause that should be included in a contract for deed?

    <p>Price and Terms</p> Signup and view all the answers

    In a contract option, what is a common clause provision?

    <p>Forfeiture terms</p> Signup and view all the answers

    In a contract for sale, what does 'validity' typically refer to?

    <p>Valuable consideration</p> Signup and view all the answers

    What recourse does a seller have in case of buyer default in a contract for deed?

    <p>Sue for specific performance or damages</p> Signup and view all the answers

    What is one of the key elements that should be met before a contract can be enforced?

    <p>Valuable consideration</p> Signup and view all the answers

    What is an important right that the buyer has in a contract for sale?

    <p>Maintaining upkeep of the property</p> Signup and view all the answers

    What is the purpose of contingencies in a real estate contract?

    <p>To ensure conditions are met before enforcing the contract</p> Signup and view all the answers

    In a real estate transaction, who is obligated to act in accordance with escrow instructions?

    <p>The disinterested party</p> Signup and view all the answers

    What happens if a seller defaults on their obligations under a real estate contract?

    <p>The buyer may cancel or sue for damages</p> Signup and view all the answers

    Which party has options including cancellation, claiming liquidated damages or suing for specific performance if a buyer defaults in a real estate contract?

    <p>The seller</p> Signup and view all the answers

    What does the unqualified acceptance of an offer in a contract result in for the buyer?

    <p>The power to enforce specific performance</p> Signup and view all the answers

    What is the main function of earnest money escrow in a real estate contract?

    <p>To secure both the validity of the contract and buyer's equitable interest</p> Signup and view all the answers

    What is one of the common clause provisions in a contract option?

    <p>Non-refundable consideration for the option right</p> Signup and view all the answers

    In a contract for deed, what does the buyer generally hold during the term of the agreement?

    <p>Equitable title</p> Signup and view all the answers

    What is a key element that should be included in a contract for sale to ensure its validity?

    <p>Valuable consideration</p> Signup and view all the answers

    What happens at the end of the term in a contract for deed?

    <p>Buyer obtains legal title</p> Signup and view all the answers

    What is one of the primary clauses that should be included in a contract for sale?

    <p>Conveyed interest type</p> Signup and view all the answers

    In a contract option, what is the purpose of recording the option?

    <p>To create legal enforceability</p> Signup and view all the answers

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