Chapter 8 Real Estate Contracts

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binder

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a short purchase contract used to secure a real estate transaction until a more formal contract can be signed, and it contains purchase price, down payment, and how the balance will be financed.

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counteroffer

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an offer made in response to an offer

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default

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failure to perform a legal duty, such as failure to carry out the terms of a contract

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earnest money deposit

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money that accompanies an offer to purchase as evidence of good faith

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equitable title

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the right to demand that title be conveyed upon payment of the purchase price

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installment contract

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a method of selling and financing property whereby the seller retains title but the buyer takes possession while making the payments

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lease option

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allows the tenant to buy the property at preset price and terms for a given period of time

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right of first refusal

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the right to match or better an offer before the property is sold to someone else

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time is of the essence

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a phrase that means that the time limits of a contract must be faithfully observed or the contact is voidable

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prorating

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the process of dividing ongoing expenses and income items

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Purchase contracts, deposit receipt, offer and acceptance, purchase offer, or purchaseand sales agreement, these are all preprinted forms that contain 4 key parts, Part one contains?

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Provision for the buyer's earnest money deposit (no laws govern the size, or even if one is needed, when earnest money is by itself is not consideration, the money can be liquidated in the event of a default,

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Purchase contracts, deposit receipt, offer and acceptance, purchase offer, or purchase and sales agreement, these are all preprinted forms that contain 4 key parts, Part two contains?

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the buyers offer to purchase?

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Purchase contracts, deposit receipt, offer and acceptance, purchase offer, or purchase and sales agreement, these are all preprinted forms that contain 4 key parts, Part three contains?

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the acceptance of the offer by the seller

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Purchase contracts, deposit receipt, offer and acceptance, purchase offer, or purchase and sales agreement, these are all preprinted forms that contain 4 key parts, Part four contains?

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provisions for the payment of brokerage commission.

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deed and condition of title who pays for title insurance

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buyer request that the seller provide and pay for a policy of title insurance

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closing agent and escrow agents handle what?

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handle the closing( in the US is called a closing meeting)

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the attorney is responsible for carrying out, what?

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the paper work and the details of the purchase agreement

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to conclude the transaction who is present?

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the buyer and seller and their attorney, the lender, & the title company representative

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loan commitment

letter

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Uniform Vender and Purchase Risk Act,

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if neither possession nor title has passed and there is a material destruction to the, property, the seller CANNOT enforce the contract and the purchase is entitled to a refund of the earnest money.

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a buyer can withdraw his can withdraw and cancel his offer at anytime before, when?

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the seller has accepted and the buyer is aware of that acceptance.

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amendatory language

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government-required clause in clauses in FHA and VA loans

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in two instances the federal government requires that specific clause be included in real estate contracts, First is

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is an amendatory language clause included wherever their is an sales contract signed by FHV appraised Value or a VA Certification of reasonable value.

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the purpose of these two values is to assure that the purchaser may terminate the contract with out loss when it appears that the agreed purchase price may be significantly above the appraised value.

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FHV appraised Value or a VA Certification of reasonable value.

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in two instances the federal government requires that specific clause be included in real estate contracts, Second is

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the federal trade commission (FTC) require that builders and sells of new home include insulation disclosers in all purchase contracts.

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rider also known as a addendum or attachments

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is an additional annexed to a document and made part of the document by reference. it is written, typed, printed on a separate piece of paper and stapled to the document

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what is the trend today on how sign a purchase contract?

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they will complete the purchase contract as soon as there is a meeting of the minds.

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what is the most important feature about a land contract, conditional sales contract, contract for deed, agreement of sale

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is that the seller does not deliver a deed to the buyer at closing. the seller promises to delivery the deed at some future date.

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the reason one may use a land contract, conditional sales contract, contract for deed, agreement of sale

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if the buyer(vendee) does not have the full purchase price in cash or is unable to borrow it from a lender. the seller (vendor) must accept a down payments plus monthly payments.

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vendor

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seller (land contract, conditional sales contract, contract for deed, agreement of sale)

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vendee

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buyer (land contract, conditional sales contract, contract for deed, agreement of sale)

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when it comes to installment contracts the seller(vendor) might have a clause saying not to record the instalment contract, what is the reason for this?

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the seller(vendor) could save the time and expanse of a regular foreclosure, the seller (vendor) would notified the buyer(vendee) in writing and this would rescind the contract.

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under equitable title seller(vendor) holds bare naked title, why?

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the buyer(vendee) has the exclusive right to purchase and can enforce specific performances of the contract to get title

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an option contract is a unilateral contract, why

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because the buyer(vendee) has the right to purchase the property but with no obligation to do so. this is a promise for a performance

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in a option contract they can require that the buyer(vendee) send, what?

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a notice of termination to the seller or the contract can go into escrow and the buyer becomes obligated to sell

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owner in a lease option

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optionor

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buyer in a lease option

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opitionee