AZK RE L-07 C-12 Contracts 3 - 104-154

  1. If there are delay on presentation or offer negotiations are lengthy, where Earnest Money Deposit check will be deposited?
    - in a Broker’s Escrow or Trust Account until offer to purchase is accepted or rejected
  2. If offer not accepted what happened to Earnest Money Deposit?
    - deposit is immediately returned to the buyer
  3. If offer is accepted what happened to Earnest Money Deposit?
    - funds are delivered to the escrow holder
  4. Equitable Title
    ... is a document that buyer will acquires after buyer and seller executed a sales contract
  5. When Title to the land will be transferred to the buyer?
    - Title to the land transfers only upon delivery and acceptance of a deed
  6. Interest In The Land
    • - is Equitable Title
    • - Document that buyer will acquires after buyer and seller executed a sales contract
  7. Who assumed the risk of destruction of premises after contract is signed by both parties?
    • - in some states
    •     - buyer assumes the risk of any damage of property that may occur before closing of contract

    • - in other states
    •    - Uniform Vendor and Purchases Risk Act
    •        - provides that the seller bears any loss or destruction of premises that occurs before title passes or the buyer takes possession
  8. Uniform Vendor and Purchases Risk Act
    - provides that the seller bears any loss that occurs before title passes or the buyer takes possession
  9. The parties may agree on a certain amount of money (___) that will compensate the nonbreaching party
    Liquidated Damages
  10. Can Earnest Money Deposit be to serve as Liquidated Damages?
    • - the Sales Contract may specify that Earnest Money Deposit is to serve as Liquidated Damages
    •     - in buyer’s default, seller keeps the deposit
    •     - seller may NOT sue for any farther damages
  11. Provisions of a Sales Contract (19)
    • 1) Purchaser Name
    • 2) Description of the property
    • 3) Seller’s Name
    • 4) Purchase Price
    • 5) - Identification of closing or settlement agent
    •      - Closing or settlement instruction 
    • 6) Date of the closing
    • 7) Title evidence that will be satisfactory to the buyer
    • 8) Method by which expenses will be prorated
    • 9) Outcome of the contract should the property be damaged of destroyed b/w signing and closing dates
    • 10) Liquidated Damages
    • 11) Contingencies or conditions of the sale
    • 12) Personal property to be left with the premises for purchaser
    •     - appliances, garden equipment
    • 13) Fixtures or other items that could be considered part of the real
    • property that are not removed by the seller before the closing 
    •     - chandeliers, storage shed
    • 14) Transfer of any applicable warranties on items
    •     - warranties of heating and cooling systems
    • 15) Identification of any leased equipment that must be transferred to the purchaser or returned to lessor
    •     - security system, cable TV
    • 16) Transfer or payment of any outstanding special assessments
    • 17) Purchase’s right to inspect the property shortly before the closing of settlement
    • 18) Documents to be provided by each party
    • 19) Dated signatures of all parties
  12. Contingencies
    - conditions included in the contract that must be satisfied before the sales contract is fully enforceable
  13. Elements of the contract clause that provides contingency (3)
    • 1) Action necessary to satisfy the contingency
    • 2) Time frame w/i which the action must be performed
    • 3) Party who is responsible for any costs involved
  14. Most common contingencies (4)
    • 1) Mortgage Contingency
    • 2) Inspection Contingency
    • 3) Property Sale Contingency
    • 4) Lienholder Approval
  15. Mortgage Contingency
    - protects the buyer’s Earnest Money if buyer is unable to secure a mortgage of the property
  16. Contingency that protects the buyer’s Earnest Money if buyer is unable to secure a mortgage of the property
    Mortgage Contingency
  17. Inspection Contingency
    • - provides that buyer may 
    •      1) obtain inspection of the property 
    •      2) cancel the contract if the inspection an unsatisfactory or unsafe property condition
  18. Inspection Contingency may include
    • - wood-boring insects
    • - lead-based paint
    • - structural and mechanical system
    • - sewage (су'идж - нечистоты) facilities 
    • - radon or other toxic material
  19. Property Sale Contingency
    • - protects a buyer who has to sell a home in order to buy the seller property
    • - protects a buyer from owning 2 homes at the same time
  20. Contingency that protects a buyer who has to sell a home in order to buy the seller property (from owning 2 homes at the same time)
    Property Sale Contingency
  21. 5) Lienholder Approval
    • - is contingency
    • - if contract in a short sale
  22. If contract in a short sale what contingency is used?
    Lienholder Approval
  23. Escape Clause
    - permits the seller to continue to market the property until all the buyer’s contingencies have been satisfied or removed
  24. What clause permits the seller to continue to market the property until all the buyer’s contingencies have been satisfied or removed?
    Escape Clause
  25. Can REP recommend sources for any inspection or testing services
    • - REP should AVOID recommendation sources for any inspection or testing services
    • - better practice to give the client the names of several professionals
  26. Can REP receive compensation form attorney of a lander?
    - REP must NEVER receive compensation form attorney of a lander
  27. What REP should do if they receive reward from a source (inspection or testing) they recommended?
    - if REP receive reward from a source they recommended, they MUST disclose that to a client
  28. Amendment
    • - change or modification to an existing content or words of provisions of a contract
    • - amendments must be
    •     - separately initialed or signed by all parties in the margin prior to (or at) the time contract is signed
  29. If contract is signed, but there a need to change one of the Contract Provision, what can be done?
    - separate agreement can be executed by the parties
  30. What is the change or modification to an existing content of a contract?
    Amendment
  31. Addendum
    • - any provision added to an existing contract
    • - must be signed by all parties
  32. If any provision added to an existing contract, we have ...
    Addendum
  33. Condition Disclosure Law
    • - Disclosure of Property Conditions
    • - helps consumers make informed decision
  34. Optionor
    - owner
  35. Optionee
    - purchaser or tenant
  36. Options
    • - is a contract by which an optionor (owner) gives an optionee (purchaser or tenant) the right to buy or lease the owner’s property at a fixed price w/i a certain time
    • - Unilateral Contract
    •      - enforceable by optionee ONLY
    • - Optionee
    •     - pays a fee as consideration of the option right
  37. Contract by which an owner gives an purchaser or tenant the right to buy or lease the owner’s property at a fixed price w/i a certain time
    Options
  38. Vendor
    • - Owner/Seller
    •     - in Owner Financing Contract (Land Contract)
    •     - retains legal title
    •     - not obligated to deliver a deed to the buyer until terns of the contract has been satisfied (all payments has been made)
  39. Vendee
    • - Buyer
    •     - in Owner Financing Contract (Land Contract)
    •     - takes possession 
    •     - gets Equitable Title to the property

    •     - agrees to
    •         - give the seller a down payment 
    •         - pay regular monthly installment of principal and interest over a number of years
    •         - pay RE taxes, insurance, premiums, repairs
    •         - upkeep no the property
  40. Owner Financing Contracts or
    • - or Land Contract
    • - or Installment Contract
    • - or Contract for Deed
    • - or Contract of Sale
    • - or Bound of Title
    • - or Articles of Agreement for Warrant Deed
    • - seller provides credit for all of part of the funds
    • - allows buyer move forward with the transaction
  41. Contract for Deed
    • - Owner Financing Contracts
    •     - seller provides credit for all of part of the funds
    •     - allows buyer move forward with the transaction
  42. Contract of Sale
    • - Owner Financing Contracts
    •     - seller provides credit for all of part of the funds
    •     - allows buyer move forward with the transaction
  43. Bound of Title
    • - Owner Financing Contracts
    •     - seller provides credit for all of part of the funds
    •     - allows buyer move forward with the transaction
  44. Installment Contract
    • - Owner Financing Contracts
    •     - seller provides credit for all of part of the funds
    •     - allows buyer move forward with the transaction
  45. Land Sales Contract
    • - Owner Financing Contracts
    •     - seller provides credit for all of part of the funds
    •     - allows buyer move forward with the transaction
  46. Articles of Agreement for Warrant Deed
    • - Owner Financing Contracts
    •     - seller provides credit for all of part of the funds
    •     - allows buyer move forward with the transaction
  47. Land Contract
    • - Owner Financing Contracts
    •     - seller provides credit for all of part of the funds
    •     - allows buyer move forward with the transaction
  48. What is another way to help a buyer to complete a transaction if the buyer has insufficient down payment?
    • - “take back a second"
    • - seller is holding part of the debt as a second mortgage

    • - in the event of buyer default
    •     - lender will still have a priority interest on the property
    •     - seller will have a secondary interest
  49. “take back a second"
    • - another way to help a buyer complete a transaction
    • - useful if the buyer has insufficient down payment
    • - seller is holding part of the debt as a second mortgage

    • - in the event of buyer default
    •     - lender will still have a priority interest on the property
    •     - seller will have a secondary interest
  50. Purchase Money Mortgage
    - seller who finances a sale can make use of a Purchase Money Mortgage

    •     - buyer
    •         - receives title to the property immediately
    •                  - but
    •         - places a security interest on the property – the mortgage – in favor of the seller interest
  51. Contract may be discharged by... (10)
    • 1) Performance
    • 2) Partial Performance
    • 3) Substantial Performance
    • 4) Novation
    • 5) Breach
    • 6) Failure to enforce contract w/i Statute of Limitations
    • 7) Mutual Agreement
    • 8) Operation of Law
    • 9) Rescission
    • 10) Cancellation
Author
flashsmilenet
ID
342916
Card Set
AZK RE L-07 C-12 Contracts 3 - 104-154
Description
AZK RE L-07 C-12 Contracts 3 - 104-154
Updated