Fall 2013 Legal Update

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| By Lyonrealestate
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Lyonrealestate
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Quizzes Created: 2 | Total Attempts: 1,091
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  • 1/25 Questions

    Good practice would be to read back through the offer, addenda and counter-offers to make sure that all of the changes from document to document make sense and there are no contradictions or confusion?

    • True
    • False
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About This Quiz

This Fall 2013 Legal Update quiz assesses knowledge on real estate transactions in California, focusing on client-agent relationships, disclosure obligations, arbitration, and contract contingencies. It is crucial for professionals aiming to ensure compliance and ethical standards in real estate practices.

California Quizzes & Trivia

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  • 2. 

    CAR Disclosure Charts are useful guides for which forms to use, what triggers a disclosure and where to get further information?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    CAR Disclosure Charts are indeed useful guides for determining which forms to use, understanding the triggers for disclosure, and finding additional information. These charts provide a clear and organized overview of the disclosure requirements and help individuals navigate the complex process of disclosing information in various contexts. By referring to these charts, individuals can ensure they are using the correct forms, disclosing the necessary information, and accessing further resources when needed.

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  • 3. 

    As a listing agent, I should make sure that the seller has the opportunity to review and update a previously-completed TDS to be certain it is accurate prior to delivering it to the buyer’s agent?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    As a listing agent, it is important to ensure that the seller has the chance to review and update a previously completed TDS (Transfer Disclosure Statement) before delivering it to the buyer's agent. This is necessary to ensure that the information provided in the TDS is accurate and up to date, as it plays a crucial role in informing the buyer about the condition of the property. By allowing the seller to review and update the TDS, any changes or updates can be made, ensuring that the buyer receives the most accurate information about the property.

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  • 4. 

    All clients in a real estate transaction in California are clients of the agent, not the broker?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    In a real estate transaction in California, the clients are actually clients of the broker, not the agent. The broker is the one who holds the license and is responsible for overseeing the transaction. The agent works under the broker and represents the broker's clients. Therefore, the correct answer is false.

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  • 5. 

    Listing agents have a duty of honesty and fair dealing to the buyer who is represented by another brokerage?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Listing agents have a duty of honesty and fair dealing to the buyer who is represented by another brokerage. This means that even though the listing agent is working for the seller, they still have a responsibility to treat the buyer fairly and honestly. This includes providing accurate information about the property, disclosing any known defects, and negotiating in good faith. This duty helps to ensure a fair and transparent real estate transaction for all parties involved.

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  • 6. 

    If I am representing divorcing sellers, and one spouse instructs me to reduce the price and the other doesn’t want the list price changed, I am obligated to change the price?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    In this scenario, as the representative of divorcing sellers, you are not obligated to change the price if one spouse instructs you to reduce it while the other spouse does not want the list price changed. As the representative, you have a duty to act in the best interest of both parties involved. If there is a disagreement between the spouses regarding the price, it is important to communicate and negotiate with both parties to find a resolution that satisfies both of them. Therefore, the correct answer is false.

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  • 7. 

    Pocket listings can be dangerous because they often result in a dual agency, selling within the company, without ever having been exposed to the market?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Pocket listings refer to properties that are not listed on the multiple listing service (MLS) and are instead marketed privately. This can be dangerous because it often leads to a dual agency situation, where the same real estate agent represents both the buyer and the seller. This creates a conflict of interest and can potentially compromise the best interests of either party. Additionally, pocket listings limit exposure to the market, potentially reducing the number of potential buyers and resulting in a lower selling price. Therefore, it is true that pocket listings can be dangerous due to the possibility of dual agency and limited market exposure.

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  • 8. 

    “Home has several normal minor settlement cracks” is a good way to describe cracks observed in a property?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Describing cracks in a property as "Home has several normal minor settlement cracks" is not a good way. The statement implies that the cracks are normal and minor, which may mislead potential buyers or renters. It is better to accurately describe the cracks, their severity, and any necessary repairs or inspections needed to ensure transparency and avoid any misinterpretation.

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  • 9. 

    If a seller is exempt from completing a TDS, they still have to disclose all material facts known to them affecting value or desirability?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Even if a seller is exempt from completing a TDS (Tax Deducted at Source), they are still obligated to disclose all material facts that they are aware of, which could impact the value or desirability of the property. This means that even though they may not have to provide certain financial information related to taxes, they still have a responsibility to be transparent about any other relevant information that could affect the buyer's decision-making process.

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  • 10. 

    Sellers should be advised to disclose ALL old reports and inspections in their possession no matter how old?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    Sellers should be advised to disclose all old reports and inspections in their possession, regardless of their age. This is important because even if the reports are outdated, they can still provide valuable information to potential buyers. By disclosing all old reports, sellers are ensuring transparency and allowing buyers to make informed decisions about the property. This can help prevent any surprises or disputes in the future and maintain a fair transaction process.

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  • 11. 

    If a seller signs and returns an offer to buyer’s agent after it has expired, there is a valid, binding Purchase Agreement?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    If a seller signs and returns an offer to the buyer's agent after it has expired, there is not a valid, binding Purchase Agreement. This is because an offer that has expired is no longer legally enforceable, and therefore cannot create a binding agreement between the parties. In order for a Purchase Agreement to be valid and binding, both parties must agree to the terms of the agreement within the specified timeframe.

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  • 12. 

    A seller doesn’t have to disclose defects that have been repaired?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    False. A seller is typically required to disclose any known defects, even if they have been repaired. This is to ensure that the buyer is fully informed about the condition of the property before making a purchase. Failing to disclose repaired defects could potentially lead to legal issues for the seller in the future.

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  • 13. 

    If there was a prior lawsuit affecting the property, seller doesn’t have to disclose that lawsuit if the case is closed?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The seller is required to disclose any prior lawsuits affecting the property, regardless of whether the case is closed or not. This is because the existence of a prior lawsuit can have an impact on the value and desirability of the property, and potential buyers have a right to be informed about any legal issues that may affect their decision to purchase the property. Therefore, the statement that the seller doesn't have to disclose a closed lawsuit is incorrect.

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  • 14. 

    If a seller who otherwise would be required to complete a TDS has not actually seen the property, they are exempt from completing the TDS?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The statement is false. The requirement to complete a TDS (Tax Deducted at Source) is not dependent on whether the seller has seen the property or not. The TDS is a tax deduction made by the buyer while making payment to the seller, and it is mandatory for certain types of transactions. The seller's knowledge or viewing of the property is not a determining factor in this requirement. Therefore, the seller is not exempt from completing the TDS, regardless of whether they have seen the property or not.

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  • 15. 

    It is okay to write two offers for two different buyers at the same time on the same property if my manager says it is okay and will supervise the offers?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Writing two offers for two different buyers on the same property at the same time, even with manager supervision, is not okay. It is considered unethical and can lead to conflicts of interest. Writing multiple offers on the same property can create a dishonest and unfair situation for the buyers involved, and it goes against the principles of fairness and transparency in real estate transactions.

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  • 16. 

    An initial deposit is required to have consideration to create a binding contract?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    An initial deposit is not required to have consideration to create a binding contract. Consideration is a legal term that refers to something of value exchanged between parties to a contract. It can be in the form of money, goods, services, or a promise to do or not do something. While an initial deposit can be a form of consideration in some contracts, it is not a requirement for a contract to be binding. A contract can be formed without any exchange of money or goods upfront, as long as there is a mutual agreement and consideration provided by both parties.

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  • 17. 

    If a neighbor tells you, the listing agent, that a neighbor is selling drugs you don’t have to disclose anything because it might not be true?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The statement is false. As a listing agent, you have a legal and ethical obligation to disclose any material facts about the property to potential buyers. If a neighbor informs you about illegal activities such as drug selling, it is important to investigate the claim and, if confirmed, disclose it to potential buyers. Failing to do so could lead to legal consequences and harm your professional reputation.

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  • 18. 

    Buyer’s three-day right to rescind the purchase agreement does not start until buyer signs the TDS?             

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The statement is false because the buyer's three-day right to rescind the purchase agreement actually starts from the date they receive the TDS (Transfer Disclosure Statement), not from the date they sign it. This means that the buyer has three days from the date of receiving the TDS to review and potentially rescind the purchase agreement if they are not satisfied with the information provided.

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  • 19. 

    If my buyers discover defects after the close of escrow that they feel seller should have disclosed, I am obligated as their agent to honor their request to help them go after the seller for failing to disclose?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    As an agent, you are not obligated to help your buyers go after the seller for failing to disclose defects discovered after the close of escrow. Your duty is to represent your clients' best interests during the transaction process, but once the escrow is closed, the responsibility for any defects falls on the buyers. They may have legal options to pursue the seller, but it is not your obligation as their agent to assist them in this matter.

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  • 20. 

    My buyers countered the seller’s Counter-Offer No. 1 with Counter-Offer No. 2 which was sent to the listing agent.  The buyers then changed their minds and signed the original Counter-Offer No. 1 and sent it to the listing agent which created a valid contract?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The buyers cannot create a valid contract by signing the original Counter-Offer No. 1 after countering with Counter-Offer No. 2. Once the buyers countered with Counter-Offer No. 2, they effectively rejected Counter-Offer No. 1. Therefore, the original Counter-Offer No. 1 is no longer valid and cannot create a contract.

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  • 21. 

    If the parties have initialed the Arbitration paragraph, they can ignore arbitration if the amount in dispute is within the jurisdiction limits of Small Claims Court?

    • True

    • False

    Correct Answer
    A. True
    Explanation
    If the parties have initialed the Arbitration paragraph, it means that they have agreed to resolve any disputes through arbitration. However, if the amount in dispute is within the jurisdiction limits of the Small Claims Court, they can choose to ignore arbitration and instead pursue the matter in the Small Claims Court. Therefore, the statement is true.

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  • 22. 

    Starting a sentence with the words “Seller shall….” or “Buyer will…” is the best way to create a contingency in the contract?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    Starting a sentence with the words "Seller shall..." or "Buyer will..." is not necessarily the best way to create a contingency in the contract. Contingencies are typically created through specific language that outlines the conditions or events that must occur for the contract to be binding. Simply starting a sentence with these phrases does not provide the necessary details and requirements for a contingency. Therefore, the statement is false.

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  • 23. 

    The seller must sign the listing agent’s AVID prior to delivery to the buyer.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The statement is false because the seller is not required to sign the listing agent's AVID (Agent Visual Inspection Disclosure) prior to delivery to the buyer. The AVID is a form used by the listing agent to disclose any known material facts about the property. It is typically signed by the seller and provided to the buyer during the transaction process. However, the seller's signature on the AVID is not a mandatory requirement before delivering it to the buyer.

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  • 24. 

    If a buyer submits an offer to a seller who signs the offer with no changes, there is an accepted contract at that moment?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    If a buyer submits an offer to a seller who signs the offer with no changes, it does not necessarily mean that there is an accepted contract at that moment. The seller signing the offer without any changes could indicate their willingness to consider the offer, but it does not confirm acceptance. Acceptance typically occurs when the seller communicates their agreement to the buyer either verbally or in writing. Therefore, without explicit acceptance from the seller, there is no accepted contract.

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  • 25. 

    If I have a listing and have my own offer when there are other offers to be presented at the same time, it is okay if I tell the seller that I will treat all offers fairly?

    • True

    • False

    Correct Answer
    A. False
    Explanation
    It is not okay to tell the seller that you will treat all offers fairly if you have your own offer when there are other offers to be presented at the same time. This would be considered unethical and a conflict of interest. As a listing agent, it is important to act in the best interest of the seller and treat all offers objectively and impartially, without favoring your own offer.

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Quiz Review Timeline (Updated): Mar 21, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Oct 11, 2013
    Quiz Created by
    Lyonrealestate
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