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Real Estate Contract
| Question | Answer |
|---|---|
| Section 1 of Sales Contract | 1. Date of the contract. 2. Parties to the contract, including marital status. 3. Jurisdiction, (state, county, and city in which property is located). 4. Legal description of the property. 5. Street address of the property |
| Section II of Sales Contract | 6. Purchase price of the property in words. 7. Purchase price of the property in numerals. 8. Method of payment. 9. Acknowledgment of receipt of deposit. |
| Section III of Sales Contract | 10. Means of conveyance of the property. 11. Possession clause, giving date buyer may take possession. 12. Closing time and place 13. Prorations adjustment. 14. "Seller's Risk" clause, the seller assumes risk of damage until settlement |
| Section IV of Sales Contract | 15. Broker's commission: specifies commission rate. 16. "Subject To" clause, contains the contingencies which must be met before the contract is executed, 17. "As Is" clause, 18. Mutual consent |
| Section V of Sales Contract | 19. Signatures: All purchasers should sign the agreement and, when applicable, their status as joint tenants in common or tenants by the entireties should be identified. |
| The signature of both spouses is important, even if one of them is not a legal owner. why? | Two signatures are necessary to release homestead rights. |
| clauses specifying provisions and conditions which must be met before an agreement is binding. If the contingencies are not met, the contract will not be valid. An example would be ability to obtain financing. | Contingency Clauses: |
| : states that the seller has inspected the property for termite damages and has remedied any damage found. | Termite Clause |
| Any other added clauses. | download |
| insures that the broker will receive a commission if his client buys the house within a certain time period after the listing agreement has expired. | Protection Clause: |
| When selling contingent upon buyer selling his house, this clause protects the seller from having to keep his house off the market for an extended period of time. | Escape Clause: |
| was the first attempt at uniformity in the use of technology in business and commerce | Uniform Electronic Transactions Act (UETA) |
| UETA | Uniform Electronic Transactions Act (UETA) |
| ESIGN Act: The Electronic Signatures in Global and National Commerce Act, or ESIGN Act, is a federal law enacted in ? legalizing the use of electronic signatures and records. | 2000 |
| This is a type of owner financing in which the owner retains title to the property until the debt for it is paid off. | INSTALLMENT SALE, LAND CONTRACT, or CONTRACT FOR DEED: |
| With Installment Sale, the buyer receives * In Louisiana, this type of contract is called "Bond for Deed". | "equitable title" to the property. Legal title is received when all his contractual obligations have been met. |
| both a contract and a conveyance. The lessee contracts to pay rent to the lessor. | _A lease is |
| The lessor conveys an interest in the property to the lessee. Like any other contract, a lease must meet certain legal requirements: | 1. Names 2. Legal capacity of parties 3. Mutual consent 4. Amount of consideration (rent) and terms 5. Rights and obligations of both parties 6. Objectives of the lease must be legal. 7. The lease must be properly executed by the lessor. |
| In most states, an offer to purchase may be revoked at any time prior to acceptance by the seller. However, in Louisiana, once an offer is presented to the seller, it cannot be revoked if it contains the clause | Revocation:"This offer is binding and irrevocable". In this case the offer must run its course. |
| When the deposit given is earnest money, either party may rescind the contract but must pay the sum designated as earnest money to the other party. Earnest money is also known as liquidated damages. | Earnest Money: |
| : If the deposit given with the contract is not earnets money, then it requires | Specific Performance Deposit; "specific performance" of the contract. |
| This means that if either party withdraws from the contract, the other party can sue to have the terms of the contract performed. | specific performance" of the contract. |
| A bill of sale is used only if | personal property is included in the conveyance of the property |
| Actual performance of the contract takes place when? The time and place of the final transfer of property are to be included in ? | at the sale closing. the sales contract. |
| contract must be performed within the time limit specified. A party who fails to perform on time is liable for breach of contract. | Time is of the essence |
| After both buyer and seller have executed a sales contract, the buyer’s interest in the property is known as | equitable title. |
| The closing statement shows: | Names • Marital status of buyers • Legal description of property • Covenants, Conditions, Restrictions and Servitudes that affect the property • Purchase price and financial arrangements • Warranties • Contingencies • Date and signature of parties |
| DEBITS & CREDITS Sale Price | Debit to Buyer Credit to Seller |
| DEBITS & CREDITS New Loan | Credit to Buyer |
| DEBITS & CREDITS Mortgage Payoff | Debit to Seller |
| DEBITS & CREDITS Interest on assumed mortgage | Credit to Buyer Debit to Seller |
| DEBITS & CREDITS Assumption | Credit to Buyer Debit to Seller |
| DEBITS & CREDITS Closing Costs | Debit to Buyer |
| DEBITS & CREDITS Deposit/Earnst Money | Credit to Buyer |
| DEBITS & CREDITS Purchase Money Mortgage | Credit to Buyer Debit to Seller |
| DEBITS & CREDITS Taxes Not Paid | Credit to Buyer Debit to Seller |
| DEBITS & CREDITS Pre Paid Taxes | Debit to Buyer Credit to Seller |
| DEBITS & CREDITS Tenants Security Deposit | Credit to Buyer Debit to Seller |
| If a property is sold for an illegal purpose, that contract is: a. void b. voidable c. unenforceable d. valid | a |
| An example of a service contract is: a. purchase agreement b. option c. listing agreement d. executed sales contract | c |
| A buyer becomes obligated when: a. he signs the purchase agreement b. the seller accepts the purchase agreement c. agent presents him with the accepted contract d. the offer is presented. | c |
| In the closing statement, new loan proceeds are listed as: a. credit to the buyer b. credit to the seller. c. debit to the buyer d. debit to the seller. | a |
| Which of the following is an example of a unilateral contract? a. open listing b. option c. exclusive listing d. exclusive agency | b |
| An owner sells her house telling the buyer the patio furniture goes with it. The furniture is not mentioned in the contract. If the seller does not leave the furniture, the buyer can: a. sue for the furniture b. not sue because it is not in writing | b |
| A contract signed under duress is: a. void b. voidable c. null d. unenforceable | b |
| A contract is signed between buyer and seller. The contract would become impossible to perform if: a. the seller dies b. the buyer is under age. c. the buyer does not have the money d. the house burns down. | d |
| Mr. Jones sold his $200,000 home for $60,000. Mr. Jones’ daughter may rescind the sale under what Louisiana law? a. dation en paiment b. lesion beyond moiety c. redhibition d. lemon law | b |
| A listing contract may be terminated if: a. the seller feels the broker is not doing a good job. b. the seller decides to list with a different broker. c. the broker thinks the house is overpriced. d. both parties agree. | d |
| A broker in listing a house, wanted an exclusive right to sell the property for 90 days. The seller wanted to retain the right to sell the property himself. What type of listing would be best? c. exclusive agency d. exclusive right to sell | c |
Created by:
bvennen
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