Chapter 4 - Covenants, Commitments, & Notices

Earnest Money

Down payment made by a purchaser of real estate as evidence of good faith. A deposit or partial payment.

Trust Funds

Money, or other things of value, that a real estate agent receives on behalf of the principal or any other person involved in a transaction.

A down payment made by a purchaser of real estate as evidence of good faith is referred to as...?

Buy-down money

Earnest money

Discount money

Origination deposit

Earnest money

Money, or other things of value, that a real estate agent receives on behalf of the principal or any other person involved in a transaction is known as...?

Earnest funds

Agent fees

Deposit funds

Trust funds

Trust funds

Which of the following acts as liquidated damages if the buyer defaults on the purchase contract...?

Earnest money

Buy-down money

Discount money

Origination deposit

Earnest money

An earnest money deposit is required in all residential transactions...?

T (True)

F (False)

False

Option

A right given for a consideration to purchase or lease a property upon specified terms within a specified time, without obligating the party who receives the right to exercise the right.

Optionee

A person who receives an option.

Optionor

A person who gives an option.

Which of the following refers to a right given for a consideration to purchase or lease a property upon specified terms within a specified time, without obligating the party who receives the right to exercise the right...?

Exclusive agreement

Earnest agreement

Open agreement

Option

Option

A person who receives an option is known as the...?

Optionee

Optionor

Trustee

Trustor

Optionee

A person who gives an option is known as the...?

Optionee

Optionor

Trustee

Trustor

Optionor

A buyer has ............ during the options period?

Legal title to the property

Full title to the property

Equitable title to the property

Interim title to the property

Equitable title to the property

Marcus has entered into a contract to purchase a new house. What will Marcus do during the options period to ensure the property is in the proper condition...?

Perform his due diligence

Obtain title insurance

Obtain a certificate of occupancy for the property

All of the above

Perform his due diligence

The buyer loses their right to a termination option if they fail to provide the options money within how many days of the effective date of the contract...?

1

3

7

30

3

The title policy for a property is discussed in paragraph ........of the One to Four Family Residential Contract - Resale?

1

3A

5

6A

6A

Who pays for the title policy as stated in the purchase contract...?

The seller only

The buyer only

Either the buyer or seller, whatever is agreed upon

The escrow company

Either the butter or seller, whatever is agreed upon

Which of the following prohibits the seller from requiring a specific title company as a condition of the sale...?

HUD

TREC

NAR

RESPA

RESPA

The title company used in a transaction must be agreed upon by both the buyer and seller...?

T (True)

F (False)

True

Since a title policy is a contract, it is...?

Binding and enforceable

Unenforceable

Acknowledged and recorded

Void

Binding and enforceable

Covenants

Agreements written into deeds and other instruments promising performance or nonperformance of certain acts, or stipulating certain uses or non-uses of the property.

Agreements written into deeds and other instruments promising performance or nonperformance of certain acts, or stipulating certain uses or non-uses of the property are known as...?

Covenants

Surveys

Commitments

Endorsements

Covenants

Rules regarding pets in a subdivision are included under which of the following...?

Commitments

Endorsements

Title policy

Restrictive covenants

Restrictive covenants

Restrictive covenants are written into what document...?

The mortgage commitment letter

The property's deed

The Certificate of Occupancy

The building permit

The property's deed

A buyer's objections to defects or encumbrances to title are described in which paragraph...?

2

3D

6D

21

6D

A summary or digest of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title is known as a...?

Abstract of Title

Survey

Chain of Title

Title Summary

Abstract of Title

Paragraph 6E of the One to Four Family Residential Contract - Resale describes which of the following...?

Disclosures

Seller Financing

Survey

Title Notices

Title Notices

According to paragraph 6E, the seller shall provide the buyer with either an abstract of title or...?

Title summary

Title commitment

Title policy

Chain of title

Title policy

Paragraph 7 of the One to Four Family Residential Contract - Resale describes which of the following...?

Earnest money

Property condition

Seller financing

Title policy

Property condition

If the seller fails to provide the buyer with the Seller's Disclosure Notice, the buyer may do which of the following...?

Change the effective date of the contract

Sue the seller for liquidated damages

Place a lien on the property

Terminate the contract and receive his/her earnest money back

Terminate the contract and receive his/her earnest money back

Buyers of residential properties built prior to 1978 are required by ......... to receive the Protect Your Family From Lead Based Paint booklet?

TREC

TRELA

HUD

RESPA

HUD

Brokers are required to maintain copies of the lead-based paint addendum for a minimum of how many years after the transaction...?

1

2

3

5

3

If the buyer accepts the condition of the property, they are accepting the property...?

As-is

With warranties from the seller

With guarantees from the seller

With a partial refund from the seller

As-is

The purchase of a residential service contract is optional...?

T (True)

F (False)

True

A residential service contract is also known as a...?

Options contract

Rebate contract

Home warranty

Title policy

Home warranty