Sales Contract Terms and Sections Defined

  1. Parties
    -identifies the seller and the buyer, as well as establishing the intent to sell and to buy
  2. Property
    -sets forth the legal description and thus identifies the property to be sold by this contract; lists fixtures, improvements, and accessories that are a part of the property, as well as those to be excluded.
  3. Sales Price
    -establishes the cash down, loan amount, and sales price
  4. Financing
    -conditions and demands of the source of borrowed funds; details of the financing are specified in an addendum to the contract--for example, Third Party Financing Addendum for Credit Approval, Loan Assumption Addendum, or Seller Financing Addendum.
  5. Addendum
    a thing to be added; an addition
  6. Earnest Money
    -specifies the amount of earnest money and identifies the escrow agent
  7. Title Policy and Survey
    -identifies which party is to pay for the title policy; notes the exceptions to title if a title policy is furnished; stipulates (demand) requirements for a title commitment; provides survey options; specifies procedures for a buyer to object to documents required in this paragraph; and includes required notices to buyer.
  8. Stipulate
    -demand that something be part of an agreement
  9. Property Condition
    -specifies a buyer's right to have the property inspected; provides for the seller's disclosure of property condition and lead-based paint and hazards; specifies any limitations on the buyer's acceptance of property condition; establishes procedures for completion of repairs; includes an environmental notice to the buyer; and presents the residential service contract/home warranty option
  10. Brokers' fees
    -notes that payments of brokers' fee are contained in separate written agreements
  11. Closing
    -establishes the target date for closing of the sale and identifies buyer and seller responsibilities at closing; contains seller representations regarding liens, assessments, and security interests
  12. Possession
    -specifies when the buyer may take possession of the property
  13. Special Provisions
    -clarifies any business details of the sale not covered by the provisions of the printed earned money contract form and not included in another TREC form; cannot include items that may constitute unauthorized practice of law.
  14. Settlement and Other Expenses
    -identifies which party is to pay a specific expense at closing
  15. Prorations (pro-rate-sions)
    -specifies which items are to be prorated and fixes the timing of such prorations through the day of closing; permits tax prorations to account for a change in exemptions; and provides for an adjustment of the tax proration after closing, when necessary
  16. Casualty Loss
    -specifies the seller's responsibility for a casualty loss before closing and the buyer's options
  17. Default
    -specifies the remedies available to each party in the event the other party breaches the contractual agreements
  18. Mediation
    -encourages peaceable resolution of disputes through mediation
  19. Attorney's Fees
    -specifies how the expenses of litigation are to be paid
  20. Escrow
    -specifies the conditions under which the escrow agent agrees to be the holder of ht earnest money and stipulates how such money is to be handled in the event the transaction does not close.
  21. Representation
    -provides for the contract to survive closing, for a remedy if seller representations are untrue, and for the seller to continue to show the property.
  22. Federal Tax Requirements
    -outlines the procedures for the buyer to follow if the seller is a "foreign person," as defined by application law.
  23. Notices
    -state requirements for delivery of notices affecting the contract
  24. Agreement of Parties
    -clarifies the understanding that no other agreements are to be relied on and identifies any TREC addenda or other forms to be a part of the contract
  25. Termination Option
    -provides the buyer with an unrestricted right to terminate the contract for a specified fee within a specified number of days after the effective date (if an option fee is paid to the seller).
  26. Consult an Attorney
    -provides notice to both parties that real estate licensees cannot give legal advice and advises both parties to seek legal counsel for advice; an agent may not discourage a principal to a real estate transaction from employing a lawyer; includes Date of Final Acceptance (establishing the effective date of the contract) and signature block.
  27. Broker Information
    • -specifies the brokers involved in the transaction and the fee to be paid to the "other broker" by the listing broker.
    • -merely informational and is not part of the contract between the parties or a separate contact between the brokers; licensees should print, not sign their names
  28. Third Party Financing Addendum for Credit Approval
    -one of the three addenda promulgated to expand the "financing" paragraph, P4, of the contract, providing conditions under which the buyer agrees to obtain financing.
  29. Backwards P symbol
    -pilcrow; paragraph marker
Author
Blue2xa88
ID
320741
Card Set
Sales Contract Terms and Sections Defined
Description
sales contract terms and sections defined.
Updated