Exam 13: Contracts for Sale and Closing

While fee splitting between cooperating real estate brokers is permitted,RESPA explicitly prohibits such actions as rebating part of the title insurance premium to the lender who recommended or required the title insurance.These unearned fees are commonly referred to as:

The laws of some states require that real estate brokers provide buyers and sellers with a list of estimated closing costs before signing a contract for sale.At the closing,it is typically which of the following party's responsibilities to pay the full premium for an owner's title insurance policy?

Since the seller often has utilized the property for a portion of the year in which the transaction is being made,certain costs associated with the property will be prorated at the closing.All of the following items are subject to being prorated EXCEPT:

Recording documents in the public records informs anyone who may have a potential interest in a property of both the owner and lender.In so doing,it provides what is commonly referred to as ____________ of an interest in real property.

Certain closing costs will be prorated to account for the period of time during which the seller occupied the house.If a transaction is scheduled to close on May 17,136 days into a 365-day year,calculate the amount that the buyer will be credited if the particular closing cost in question is estimated to be $1000 for the entire year.

When a buyer signs an offer to purchase a property,the broker receives a monetary amount from the purchaser of 5 or 10 percent of the purchase price.This deposit is commonly referred to as the:

Both parties to a valid and enforceable contract must provide consideration.In a contract for the sale and purchase of real estate,which of the following depicts the seller's consideration?

If property owners fail to pay their taxes in a timely fashion,this can create a first lien on the mortgaged property.In order to protect against this,lenders often require that borrowers add what fraction of their estimated tax bill to their required monthly mortgage payments?

The distinction between legal title and equitable title is an important concept in the contract for sale of real estate.When the buyer obtains equitable title,the seller can no longer sell the property to someone else,even though the legal title has not officially passed on.In the contract for sale process,the creation of equitable title occurs when:

In general,most contracts - including real estate contract - can be assigned.All of the following statements regarding assignment are true EXCEPT:

Since the issues in many transactions are similar,brokers often use standard preprinted contract forms.Generally,the best standard form contracts are those prepared and approved by which of the following parties?

Contracts for sale may contain sections that cause implementation of the contract to depend on the successful completion of some prior action such as the buyer's ability to obtain financing on specified terms.This type of contract is commonly referred to as a(n):

In certain circumstances,mutual assent between the contracting parties may be broken,thus invalidating the contract.Which of the following defects to mutual assent involves compelling a person to act by the use of force?

Any contract,whether it is for the sale of real estate or some other entity,must contain five basic elements.However,any contract for the sale of real estate must adhere to two additional requirements.Which of the following contract elements is an additional requirement that must be satisfied in a contract for sale of real estate that isn't necessarily a part of other contracts?

In accordance with RESPA,whenever a buyer obtains a new first mortgage loan from a chartered or insured lender,when the loan is insured by the FHA or guaranteed by the VA,or when the loan will be sold to one of the federally related secondary mortgage market agencies,a good-faith estimate of the settlement costs must be provided by the lender within:

While the principal parties to a transaction must be legally competent for a contract to be valid,it is possible for a party acting on behalf of a principal to obtain this legal right.In order for personal representatives and trustees to be authorized to act on behalf of a principal,a legal instrument commonly referred to as ____________ must be in place.

At the closing,the buyer will be credited for a number of costs that have been paid up front as well as a number of prorated expenses that account for the period of time during which the seller occupied the house.All of the following items detailed in the closing costs involve credits that are commonly passed on to the buyer EXCEPT:

The Real Estate Settlement Procedures Act (RESPA)is a federal law that requires federally chartered or insured lenders to provide buyers and sellers with information on all settlement costs.According to RESPA,loan closing information must be prepared on a special form know as the:

The successful conveyance of real estate depends on a well-formed contract for sale since the contract dictates the rights and type of deed involved,as well as choreographs the entire transaction.Which of the following features of the contract for sale refers to the arrangements agreed to by the parties,such as price and date of closing?

When a party in a contract fails to perform (e.g.breach of contract,nonperformance,or default)the other party has a variety of remedies.All of the following are remedies that an aggrieved seller may pursue EXCEPT: