Peterson FINC 371: Latest Exam 2
Questions And All Correct Answers .
Acceptance - Answer the action of consenting to receive or undertake something offered
agreements for deed - Answer a type of seller financing in which the borrower/buyer makes
payments to the seller/lender until an agreed upon amount has been paid and the seller/lender
then delivers the deed to the buyer
breach of contract - Answer The failure, without legal excuse, of a promisor to perform the
obligations of a contract.
Closing - Answer a meeting of the seller, the buyer, and the lender of funds, or representatives
of each party, to complete the transaction
consideration - Answer something of value exchanged for something else of value
Contingencies - Answer events with uncertain outcomes that may represent potential
liabilities
contract - Answer a binding agreement between two or more persons that is enforceable by
law
Contract for Deed - Answer A means by which the seller passes possession but retains title to
the property until the total or a substantial portion of the purchase price is paid. Installment
contract. The two parties here are the vendor (owner) and the vendee (buyer).
Contractual Capacity - Answer The legal ability to enter into contracts. The threshold mental
capacity required by law for a party who enters into a contract to be bound by that contract.
Counteroffer - Answer An offeree's response to an offer in which the offeree rejects the
original offer and at the same time makes a new offer.
Escrow Agent - Answer the neutral third party who conducts the closing in real property sales
,Financing Contingency - Answer allows a buyer who is not able to arrange the necessary
financing within a certain time period to cancel the contract and recover any earnest money
paid without further obligation
inspection and repair contingency - Answer clause in a real estate contract that permits the
buyer to have a qualified inspector examine the property for any physical defects that the seller
may be obligated to repair
Land Contract - Answer The seller accepts a down payment on a parcel of land but title to the
property does not pass until the last principal payment has been received. This is referred to as
an installment sales contract or a contract for a deed.
offer - Answer A promise or commitment to perform or refrain from performing some
specified act in the future.
Offeree - Answer A person to whom an offer is made.
Offeror - Answer A person who makes an offer.
option-to-buy contract - Answer a contract that gives one party the right, but not an
obligation, to purchase a property within a specified time horizon at a specified price
Partial Performance - Answer An exception to the statute of frauds in which the performance
of portions of an unwritten agreement by one or both parties can constitute proof that an oral
contract exists between the parties.
sales contract - Answer A contract for the sale of goods under which the ownership of goods is
transferred from a seller to a buyer for a price.
settlement - Answer A permanent collection of buildings and inhabitants.
Specific Performance - Answer An equitable remedy requiring the breaching party to perform
as promised under the contract; usually granted only when money damages would be an
inadequate remedy and the subject matter of the contract is unique (for example, real
property).
, title contingency - Answer a clause in a sales contract that cancels the contract if the seller
cannot provide clear title to the buyer
agency - Answer the potential power of individuals and groups to contest cultural norms,
values, mental maps of reality, symbols, institutions, and structures of power
agent - Answer a person who acts or does business for another
Blockbusting - Answer A process by which real estate agents convince white property owners
to sell their houses at low prices because of fear that persons of color will soon move into the
neighborhood
Broker - Answer a person who is paid to buy and sell for someone else
Buyer Representation Agreement - Answer A principal-agent relationship in which the real
estate professional acts on behalf of the buyer, usually as an agent, with fiduciary
responsibilities to the buyer.
Buyer's Agent - Answer A real estate professional who is under contract to locate property for
a buyer and represent the buyer's interests in a transaction.
commission - Answer An amount paid to an employee based on a percentage of the
employee's sales
Commission Agreement - Answer an agreement between a seller and a broker for the
payment of a commission if the broker is successful in locating a buyer for the seller's property
Dual Agent (Limited Agent) - Answer When the agent is representing both principals in a
transaction with their informed consent. (Also known as a limited agent.)
exclusive-brokerage listing - Answer an agreement between a property owner and a single
broker authorizing that broker to seek a buyer for the property in exchange for compensation
Exclusive right to sell - Answer a listing that gives the broker the right to collect a commission
no matter who sells the property during the listing period.
Questions And All Correct Answers .
Acceptance - Answer the action of consenting to receive or undertake something offered
agreements for deed - Answer a type of seller financing in which the borrower/buyer makes
payments to the seller/lender until an agreed upon amount has been paid and the seller/lender
then delivers the deed to the buyer
breach of contract - Answer The failure, without legal excuse, of a promisor to perform the
obligations of a contract.
Closing - Answer a meeting of the seller, the buyer, and the lender of funds, or representatives
of each party, to complete the transaction
consideration - Answer something of value exchanged for something else of value
Contingencies - Answer events with uncertain outcomes that may represent potential
liabilities
contract - Answer a binding agreement between two or more persons that is enforceable by
law
Contract for Deed - Answer A means by which the seller passes possession but retains title to
the property until the total or a substantial portion of the purchase price is paid. Installment
contract. The two parties here are the vendor (owner) and the vendee (buyer).
Contractual Capacity - Answer The legal ability to enter into contracts. The threshold mental
capacity required by law for a party who enters into a contract to be bound by that contract.
Counteroffer - Answer An offeree's response to an offer in which the offeree rejects the
original offer and at the same time makes a new offer.
Escrow Agent - Answer the neutral third party who conducts the closing in real property sales
,Financing Contingency - Answer allows a buyer who is not able to arrange the necessary
financing within a certain time period to cancel the contract and recover any earnest money
paid without further obligation
inspection and repair contingency - Answer clause in a real estate contract that permits the
buyer to have a qualified inspector examine the property for any physical defects that the seller
may be obligated to repair
Land Contract - Answer The seller accepts a down payment on a parcel of land but title to the
property does not pass until the last principal payment has been received. This is referred to as
an installment sales contract or a contract for a deed.
offer - Answer A promise or commitment to perform or refrain from performing some
specified act in the future.
Offeree - Answer A person to whom an offer is made.
Offeror - Answer A person who makes an offer.
option-to-buy contract - Answer a contract that gives one party the right, but not an
obligation, to purchase a property within a specified time horizon at a specified price
Partial Performance - Answer An exception to the statute of frauds in which the performance
of portions of an unwritten agreement by one or both parties can constitute proof that an oral
contract exists between the parties.
sales contract - Answer A contract for the sale of goods under which the ownership of goods is
transferred from a seller to a buyer for a price.
settlement - Answer A permanent collection of buildings and inhabitants.
Specific Performance - Answer An equitable remedy requiring the breaching party to perform
as promised under the contract; usually granted only when money damages would be an
inadequate remedy and the subject matter of the contract is unique (for example, real
property).
, title contingency - Answer a clause in a sales contract that cancels the contract if the seller
cannot provide clear title to the buyer
agency - Answer the potential power of individuals and groups to contest cultural norms,
values, mental maps of reality, symbols, institutions, and structures of power
agent - Answer a person who acts or does business for another
Blockbusting - Answer A process by which real estate agents convince white property owners
to sell their houses at low prices because of fear that persons of color will soon move into the
neighborhood
Broker - Answer a person who is paid to buy and sell for someone else
Buyer Representation Agreement - Answer A principal-agent relationship in which the real
estate professional acts on behalf of the buyer, usually as an agent, with fiduciary
responsibilities to the buyer.
Buyer's Agent - Answer A real estate professional who is under contract to locate property for
a buyer and represent the buyer's interests in a transaction.
commission - Answer An amount paid to an employee based on a percentage of the
employee's sales
Commission Agreement - Answer an agreement between a seller and a broker for the
payment of a commission if the broker is successful in locating a buyer for the seller's property
Dual Agent (Limited Agent) - Answer When the agent is representing both principals in a
transaction with their informed consent. (Also known as a limited agent.)
exclusive-brokerage listing - Answer an agreement between a property owner and a single
broker authorizing that broker to seek a buyer for the property in exchange for compensation
Exclusive right to sell - Answer a listing that gives the broker the right to collect a commission
no matter who sells the property during the listing period.
