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Champions School of Real Estate-Law of Contracts Exam 1 Questions with Correct Answers
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Champions School of Real Estate-Law of Contracts Exam 1 Questions with Correct Answers
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Champions School of Real Estate-Law of ContractsExam 1 Questions with Correct Answers
Default of Contract Correct Answer-When a party to a contract fails to
perform under the contract, also known as breach of contract.
Buyer Default(Remedies) Correct Answer-In the event of default by the
buyer, the seller may have several options which include:
-Liquidated Damages
-Monetary Damages
-Specific Performance
Liquidated Damages Correct Answer-The seller can choose to accept the
buyer's earnest money as liquidated damages, releasing all parties from
any further obligation under the contract. Liquidated damages are
damages that are established in the contract.
Monetary Damages Correct Answer-In addition to specific performance,
the injured party may "seek such other relief as may be provided by
law." This would be an award of monetary damages by the court.
Because monetary damages are awarded by the court, one never knows
what they will be until the court rules.
Specific Performance Correct Answer-The injured party files a court
action seeking an order of the court directing the defaulting party to
perform according to the terms of the contract. Specific performance is
the only remedy that would possibly result in the full execution (closing)
of the transaction.
,Buyer Default Correct Answer-In the event of default by the buyer, the
seller may have several options which include:
-Liquidated Damages
-Monetary Damages
-Refund of Earnest Money
Refund of Earnest Money Correct Answer-The buyer's acceptance of an
earnest money refund terminates the contract, releasing both parties
from any further obligation under the contract. Because this is a refund
of the buyer's earnest money, this cannot be considered liquidated
damages.
TREC has only two promulgated lease forms: Correct Answer-1.
Buyer's Temporary Residential Lease
2. Seller's Temporary Residential Lease
Buyer's Temporary Residential Lease Correct Answer-For use when the
buyer occupies the property for
no more than 90 days prior to closing.
Seller's Temporary Residential Lease Correct Answer-For use when the
seller occupies the property for no more than 90 days after closing.
,Right of First Refusal Correct Answer-Gives the tenant the right to
purchase the leased property by matching or bettering any offer before
the property will be sold to someone else.
-TREC does not have promulgated forms for this.
Lease-Purchase Agreement Correct Answer-Gives the tenant occupancy
in the present time and the right to purchase at a future date. In an option
to purchase, the price is set when the lease agreement is negotiated,
which is advantageous to the tenant-buyer.
-TREC does not have promulgated forms for this.
TVLB (Texas Veteran's Loan Program) Correct Answer-To participate
in the program, the veteran obtains an FHA, VA, or conventional loan
from a participating lender. The qualification process is the same as for
any other FHA, VA, or conventional loan. The difference is that the loan
is sold to the Texas Veterans Land Board (VLB), as opposed to a
secondary market purchaser such as Fannie Mae or Freddie Mac. The
primary benefit to the veteran is that the rate on the Veterans Land
Board loan is often up to one percent below prevailing market rates.
Physical Characteristics of Land Correct Answer-1. Indestructibility or
durability
2. Immobility
3. Nonhomogeneity
Economic Characteristics of Land Correct Answer-1. Scarcity
2. Modification
, 3. Fixity
4. Stitus
Indestructibility or Durability Correct Answer-Refers to the fact that
land cannot be destroyed
Immobility Correct Answer-Refers to the fact that land cannot be
moved.
Nonhomogeneity Correct Answer-Refers to the fact that no two parcels
of land are the same.
Scarcity Correct Answer-Comes from the theory of supply and demand.
When there is a shortage of something that individuals want, the price
goes up.
Modification Correct Answer-Refers to the fact that value is affected by
man-made changes to the land.
Fixity Correct Answer-Refers to the fact that land, and additions to the
land, such as buildings, take long periods to pay for themselves.
Stitus Correct Answer-Refers to the location of the property or land from
an economic, not geographic view point.
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