Contracts, Finance, and Transfer Practice Question
Question
A broker is correcting a new licensee’s misunderstanding for the Michigan Real Estate Salesperson Exam involving statute of frauds and agency and trust-money compliance. Which answer best reduces risk? (Item 92)
Answer choices
- A. Local custom controls even when a statute, regulation, contract, or disclosure rule applies.
- B. The requirement matters only when the buyer obtains institutional financing.
- C. The affiliated licensee may handle the matter independently without broker responsibility.
- D. Recognize that many real estate agreements must be written to be enforceable in a way that fits Michigan exam practice.
Correct Answer
D. Recognize that many real estate agreements must be written to be enforceable in a way that fits Michigan exam practice.
Explanation
The correct answer is D because statute of frauds requires candidates to recognize that many real estate agreements must be written to be enforceable. The Michigan reference keeps the scenario tied to state licensing practice, while the other options rely on unsafe assumptions about oral custom, escrow, client preference, independent licensee authority, or ignoring written duties.
Question details
- Difficulty: hard
- Domain: Contracts, Finance, and Transfer
- Objective: statute of frauds