2. Earnest money, also known as a pledge, is a certain amount of money that a buyer pays to a seller to demonstrate his good faith and intention to complete the transaction. Different jurisdictions may have different legal circumstances around earnest money. This is an example of a legal kickback or rebate. sales associate is required to deliver the deposit to the broker by the end of business. The Great Fish Taco Corporation currently has fixed operating costs of $15,000, b. Assignment c. Specific Performance d. Mutual Rescission. The statement is TRUE. Earnest money must be at least 10% of the contract price. Which of the following should he not list as an asset? The answer is THE SELLER MUST PROVIDE THE BUYER WITH A DISCLOSURE SUMMARY REGARDING THE ASSOCIATION. 2. When all the conditions of the purchase and sale are met, the money is paid to the seller as part of the purchase price. That leaves $1,000 in "excess deposit" that will be paid back to the seller. A)Attorneys trust account B)The broker must report conflicting demands regardless of where the funds are escrowed C)Florida savings association D)Florida credit union. Earnest money is usually paid by certified check, personal check,or a wire transfer into a trust or escrow account thatis held by a real estate brokerage, legal firm,or title company. She decides to attend a 2year program to become a veterinary technician, and then work for 3 years in that field while she saves money for her remaining 2 years of college and veterinary school. The answer is TENANTS AND BUYERS OF ALL RESIDENTIAL PROPERTY BUILT PRIOR TO 1978. TRUE OR FALSE: A Corporation sole is permitted to register as a real estate broker. The two parties agree that one party will be solely liable for the debts of the business and that the other party will be liable only for the amount of his cash investment in the business. The answer is MONDAY. The listing agent and buyer's agent are both owed 3% of the sale price, or a total of 6% ($6,000) at closing. The exact amount depends on what's customary in your market. 2003-2023 Chegg Inc. All rights reserved. Usually, it ranges between 1-10% of the homes sale price. Which statement applies to this situation? b. liquidated damages to the seller c . NOTIFY THE FREC IN WRITING OF THE GOOD FAITH DOUBT WITHIN 15 BUSINESS DAYS. As long as a buyer follows the terms of the contract and adheres to all deadlines agreed to with the seller, a buyer will most often receive their full earnest money deposit(s) back. b. A)The seller can give the sales associate a gift certificate because it is not cash. Who must receive the lead-based paint disclosure? Earnest money deposits can be anywhere from 110% of the sales price, depending mostly on market interest. A limited partnership is composed of one or more general partners and one or more limited partners. Which statement is FALSE regarding counteroffers? The statement is TRUE. The seller wants to recover damages in excess of the earnest money deposit. What are the 3 exceptions related to the notice and settlement procedures for sales escrow accounts: 1) If a HUD sale, the broker would follow their guidelines2) If a buyer of a condo unit timely delivers to a licensee written notice of their intent to cancel the contract as authorized by the Condominium Act, the licensee may return the funds3) Buyer cant get financed. Expert Answer 100% (2 ratings) Before the earnest money was deposited, the buyer backed out. Regarding the parties in a contract, novation is the substitution of a new party for the original one. Earnest money is a deposit made to a seller that represents a buyer's good faith to make a purchase such as the acquisition of a new home. For example, if a buyer simply has a change of heart decides not to buy the property, the seller is most likely entitled to retain earnest money proceeds. The transaction was not completed, who should the boat title be returned to? In many ways, earnest money can be considered a deposit on a home, an escrow deposit, or good faith money. The money one would have earned if she/he had worked instead of continuing her/his education is called the: David plans to apply for college in 2 years. D)Susan has formed a limited liability company (LLC) for income tax purposes only, and is employed by and registered under either a licensed real estate broker or an owner-developer. A contract that is NOT in writing is called a. a formal contract b. a parol contract c. a unilateral contract d. an executory contract, When a contract has been formed but an undertaking remains to be performed by one or both parties, it is an example of a. an implied contract b. an express contract c. an executory contract d. a unilateral contract. B)The seller cannot give the gift certificate to the sales associate directly, but may give it to the sales associates broker with a note requesting that the gift certificate be given to the sales associate for fine service. The following statement regarding earnest money is FALSE: Earnest money is not required for a contract to be valid. Ive had many residents leave behind furniture, belongings, etc. "RCW 64.04.220. Four good reasons to indulge in cryptocurrency! The new location must be registered and the fee paid. The answer is SPECIFIC PERFORMANCE. sells its premade tacos for$6 per box, and incurs variable operating costs of $2.50 2. What does Florida's Homeowner Association Law require of sellers who own property subject to a mandatory homeowners' association? The amount is usually 1%-2 % of the sale price or a fixed amount. Which court case made clear that material defects that affect the value of residential property must be disclosed to prospective buyers? D) Most lenders require that an energy efficiency rating be conducted before approving a mortgage loan. Which of her concerns is she most likely to have answered as a result of her job shadow? Common tasks and typical daily activities. Mutual rescission b. performance c. breach d. all of these. If a buyer is unable to obtain a loan/financing (as long as this funding contingency is agreed upon). Many buyers know this and are willing to put down a larger deposit. The answer is FOUR. The seller must inform the code enforcement agency regarding the name and address of the buyer within 5 days of the title closing. The Statute of Limitations designates that the terms of a written contract may be enforced for a period of five years. What amount is he keeps a combined account? c. The couple must have the home inspected for lead-based paint. EMD shall be forfeited if the Bidder: (i) makes misleading or false representations in the forms, statements and attachments submitted, has suppressed any material . An option contract is a bilateral contract. A corporation sole cannot be registered as a real estate broker. "Instructions for the Requester of Form W-9. Internal Revenue Service. Home; About us; Services; Books. The answer is THE SELLER CANNOT GIVE THE GIFT CERTIFICATE TO THE SALES ASSOCIATE DIRECTLY, BUT MAY GIVE IT TO THE SALES ASSOCIATES BROKER WITH A NOTE REQUESTING THAT THE GIFT CERTIFICATE BE GIVEN TO THE SALES ASSOCIATE FOR FINE SERVICE. Jul 6, 2022 A)#1Service Realty B)Mike Meyers C)Susan Meyers, Broker Associate D)Licensed real estate broker, The answer is SUSAN MEYERS, BROKER ASSOCIATE. True False. The money is usually held in an escrow company account, a title company account, the buyer's broker's trust account, or the seller's broker's trust account. Which is not a potential consequence if he decides to default on the student loan? No more than 5 per quarter. Not release the money without a written release from both parties or both parties' duly authorized agents (power of attorney or attorney at law). A real estate agent is a licensed professional who represents buyers or sellers in real estate transactions. Brett is creating a Statement of Financial Position and needs to list his assets. Jaimen is struggling to make his student loan payments after college. By end of business on which day must the check be deposited into the escrow account? There is a limited exception in Florida that DOES NOT apply on the Federal level. If the firm has a potential investment that would simultaneously raise its For example, a seller may require a buyer to make monthly earnest deposits on a fixed schedule over a three month due diligence period. THE BROKER MUST REGISTER THE NEW BRANCH LOCATION AND PAY THE BRANCH OFFICE LICENSE FEE. A licensed real estate broker has a successful real estate business. The following statement regarding earnest money is FALSE: Earnest money is not required for a contract to be valid. FIVE YEARS REGARDLESS OF WHETHER TRUST (ESCROW) FUNDS WERE COLLECTED. . A suit for compensatory damages is a suit that seeks money damages. A)Friday B)Monday C)Wednesday D)Tuesday. Which question is the least important one to consider at this point? 13 - Property Condition Disclosure Report, Edge Reading, Writing and Language: Level C, David W. Moore, Deborah Short, Michael W. Smith, The Language of Composition: Reading, Writing, Rhetoric, Lawrence Scanlon, Renee H. Shea, Robin Dissin Aufses. Escrow broadly refers to a third party that holds money or an asset on behalf of the other two parties in a transaction. Johnson v. Davis is a legal case that took place in Florida that set legal precedence concerning material defects. Brokers must notify the FREC in writing of conflicting demands or of a good-faith doubt within ___ days. Suppose Tom wants to buy a home worth $100,000 from Joy. Earnest money is made as an initial prepayment in the sale process. Amanda and Marcus just finished their Income and Expense Statement for last month. Should a buyer break the terms of the contract, they may be at risk of losing their earnest money deposit. Buyer Jim put down a deposit in the form of a boat title worth $5,000. CFI offers the Commercial Banking & Credit Analyst (CBCA) certification program for those looking to take their careers to the next level. Since the amount is less than $600, Tom is not required to fill out an IRS form to retrieve the amount. The answer is COMPENSATORY DAMAGES. Which statement is FALSE regarding counteroffers? Broker must submit the change to the Real Estate Division of IDFPR. Mutual assent refers to the making and acceptance of an offer. Depository Assets. The funds are held in the account until closing, when they are applied towardthe buyer's down payment and closing costs. Which sentence contains an error in capitalization? The sales associate is required to deliver the deposit to the broker by the end of business on 5 years. The. Taxes she paid based on her income last year. Bob the sponsoring broker who accepts earnest money and maintains the bookkeeping system must reconcile each escrow account that he maintains within: Ten days after he receives the monthly bank statement. These rescission rights are usually . The answer is LIMITED PARTNERSHIP. Therefore, a buyer should offer a high enough earnest deposit to be accepted, but not one so high as to put extra money at risk. The answer is COOPERATIVE ASSOCIATION. The answer is CAUTION BUYERS THAT THEY CANNOT RELY ON THE SELLER'S PROPERTY TAX HISTORY AS AN INDICATION OF BUYER'S FUTURE PROPERTY TAX BILL. b. Before dealing with a corporation sole, a broker should obtain a written opinion from an attorney who has experience in such titles. The seller told her broker that she was revoking the counteroffer and accepting the buyer's original offer. Advertising rental property information that is materially inaccurate is which type of violation? The answer is THE PERIOD OF TIME THAT A WRITTEN CONTRACT IS LEGALLY ENFORCEABLE. One user asked if putting your rubbish in someone elses bin was illegal. The party bringing suit seeks an amount of money equal to the extent of loss suffered (compensatory damages). What is the fine per telephone call for a violation of Floridas Telemarketing Act? Under which name may she register and be licensed? The Florida Building Energy-Efficiency Rating Act requires that buyers, before signing the sale contract, receive an information brochure notifying the purchaser of the option for an energy-efficient rating on the building. Which contract does NOT come under jurisdiction of the statute of frauds? 2 c. 3 d. all are correct. Normally, a sale contract involving real property contains a provision that in case of breach by the buyer, the earnest money deposit will be regarded as a. compensatory damages to the seller. First, buyers can ensure that contingencies apply to defects, financing, and inspections. The answer is UNILATERAL. An implied contract is one in which some or all of the obligations or conditions of a contract are NOT stated expressly.