Real Estate: The Sales Process! Quiz

Explanation
The most important contract in the sale of real property is called the "agreement of sale" because it outlines the terms and conditions of the sale, including the purchase price, payment terms, and any contingencies. This contract is legally binding and serves as a crucial document for both the buyer and the seller to ensure a smooth and fair transaction.

Explanation
The agreement of sale is the most important contract for the sale of real estate and represents a legally binding contract and both parties are legally bound to honor the terms and conditions of the contract.

Explanation
The statement is true because according to the Rules and Regulations of the Pennsylvania Real Estate Commission, licensed real estate agents are required to provide buyers with a reasonable and accurate written estimate of closing costs before they sign the agreement of sale. This requirement ensures that buyers are fully informed about the potential costs involved in the real estate transaction.

Explanation
The "Statute of Fraud" is a requirement that the Agreement of Sale must be in writing. All contracts must be in writing and signed.

Explanation
The explanation for the given correct answer is that in a legal context, the person making an offer is referred to as the "offeror" and the person receiving the offer is called the "offeree". This terminology is commonly used in contract law to distinguish between the parties involved in the negotiation process. Therefore, it is true that the prospective buyer is officially known as the "offeror" and the prospective seller is officially known as the "offeree".

Explanation
It is known as an Earnest Money Deposit.

Explanation
If the offer made through the agreement of sale is accepted by the seller, it means that both parties have agreed to the terms and conditions of the sale. In this case, the earnest money deposit, which is a sum of money paid by the buyer to show their commitment to the purchase, is at risk. If the buyer defaults on the agreement, meaning they fail to fulfill their obligations, the seller has the right to keep the earnest money deposit as liquid damages. This serves as compensation for any losses or damages incurred by the seller due to the buyer's default. Therefore, the statement is true.

Explanation
Must be deposited by the end of the next business day following its receipt. An exception to the law: If money of another has been tendered to the broker in the form of a check....with the written permission of both the buyer and the seller or the lessee and lessor, refrain from depositing money into an escrow account by the deadline pending the seller's or lessor's acceptance of the offer. The broker is then required to deposit the money into the escrow account within 1 business day of the acceptance of the offer.

Explanation
3 choices: 1) Accept offer, 2) Reject Offer, 3) Make counteroffer.

Explanation
A counteroffer is a response to an original offer in a negotiation process. By law, a counteroffer is considered as a rejection of the original offer because it introduces new terms or conditions. This means that the party making the counteroffer is not accepting the original terms and is proposing alternative terms instead. Therefore, it can be said that a counteroffer represents a total rejection of the original offer.

Explanation
A swing loan represents a risk to the borrower/buyer as they may be burdened with payments on 3 property loans: 1) mortgage on an old home that remains unsold, 2) mortgage loan needed to purchase a new home, 3) swing loan needed to carry over the cash from the old unsold home to make a down payment on the purchase of a new home.

Explanation
Entering into an agreement of sale to purchase a new home without having sold an old home can pose significant risks to the borrower-buyer. If the old home is not sold in time to go to settlement on the new home, the borrower-buyer may be burdened with payments on three property loans. These include the mortgage on the old unsold home, the mortgage loan needed to purchase the new home, and the swing loan needed to carry over the cash from the old unsold home to make a down payment on the new home. Therefore, it is true that there are numerous risks to a borrower-buyer in this situation.