Module 4: Hawaii Pre-Licensing Real Estate Exam Questions And Answers

Module 4: Hawaii Pre-Licensing Real Estate Exam Questions And Answers Which of the following best represents rescission of a contract? A) Option to purchase can be transferred by a lessee to a lessor B) Lease was terminated with the mutual agreement of both parties C) One of the parties can change the contract at a later date D) Offer to buy - ANS B) Lease was terminated with the mutual agreement of both parties An offer, where no earnest money or deposit is given with the contract, is valid. A) True B) False - ANS True. Deposits are not an indication of valuable consideration. There could be no money down and be a valid contract although the seller may question the sincerity of the offer with nothing down. After signing a contract for the sale of real estate, a deed can be given to a buyer or third party designated as the: A) Principal B) Assignee C) Grantor D) Escrow agent - ANS B) Assignee The assignor is still liable for the consummation of the contract if the assignee defaults on the purchase. An agent is considered to have earned his commission when the: A) Listing contract is signed by the seller B) Title insurance policy is delivered to the buyer C) Title search is completed and title is recorded D) Purchase agreement is signed and all the conditions are satisfied - ANS D) Purchase agreement is signed and all the conditions are satisfied 5) A "Power of Attorney": A) Must be in writing B) Is revoked by the death of either party C) Both of the above D) None of the above - ANS C) Both of the above A salesperson, with full knowledge, writes deceptive information in a sales contract. One of the parties to the contract acts on the information provided and incurs damages. The action of the salesperson constitutes: A) Undue influence B) Duress C) Breach of contract D) Misrepresentation or fraud - ANS D) Misrepresentation or fraud A real estate sales contract that binds one party but allows the other party to withdraw is: A) A land contract B) An installment contract C) A voidable contract D) A void contract - ANS C) A voidable contract The contract can be voided by the party that is lied to but not by the party that lied. Which is true regarding a buyer's earnest money deposit and offer to purchase? A) They may demand full repayment if they withdraw the offer prior to the seller's acceptance B) It is subject to forfeiture to the seller in the event the buyer fails to consummate the agreement C) Both of the above D) None of the above - ANS C) Both of the above A broker recommends to a seller that he remodel the kitchen before selling his home. A contractor is hired and completed the remodeling. Escrow closes within 30 days. After closing, the buyer was not aware that the contractor was not paid for the remodeling. The contractor has a right to file: A) Mechanic's lien B) Building Permit Violation C) Circuit Court Judgment D) Indemnification agreement - ANS A) Mechanic's lien A mechanic's lien can be filed by the contractor and any supplier of services and materials for the subject property. The seller and buyer may be liable for the removal of the lien. The seller must give the buyer a disclosure form: A) Upon receipt of the Purchase Contract B) Within 5 days of acceptance of the offer C) Within 10 days of acceptance of the offer D) Anytime before closing - ANS C) Within 10 days of acceptance of the offer A faxed acceptance is: A) Binding with hard copy to follow B) Fully binding and effective whether or not originally executed documents are transmitted to escrow C) Is not binding if not legible D) Must be confirmed - ANS B) Fully binding and effective whether or not originally executed documents are transmitted to escrow The Purchase Contract clearly states that faxed copies are binding on both parties. A sales agent takes a listing where the owner states that the refrigerator will not be included in the sale. When writing up the Purchase Contract, the sales agent inadvertently checks the "refrigerator included" box. Now both the seller and buyer want the refrigerator. A) Since the listing and MLS forms state no refrigerator, the buyer has not given legal notice in writing that the refrigerator is included B) The Purchase Contract is enforceable C) The listing form takes precedence D) The sales agent would probably have his license revoked - ANS B) The Purchase Contract is enforceable