Post-License Ch.9 Summary Notes
The Statute of Frauds states that any contract for the sale of real property must be in writing and signed by all parties involved.
An option contract it’s a unilateral agreement. A standard sales contract is a bi-lateral agreement.
A voidable contract is one that looks valid but can, in fact, be broken. An implied contract is created when actions indicate intent.
The best place to find an accurate legal description is on the current deed or title.
Residential Sale and Purchase Contract
If the sellers are married you want both of them to sign the sales contract. The full deposit amount may be divided into two smaller amounts.
The buyer has a limited time frame in which to obtain financing, typically 30 days. Seller financing could be one of two things:
- The seller agrees to let the buyer pay him a set amount.
- The buyer assumes the seller’s existing mortgage.
When determining a closing date, the agent should take into consideration how long it will take the buyer to get appropriate financing.
Another contingency is for insurance underwriting. Electronic closings are allowed.
If there is title insurance that properly covers the buyer in case of title defects, all monies will be disbursed at the closing.
Buyer is responsible for paying taxes and recording fees for the mortgage and the deed.
Title insurance allows the seller to determine what type of evidence he must provide to show that the title is free of defects and who will pay for title insurance.
Taxes, assessments, association and other fees will be prorated and paid up-to-date by the seller, with the buyer agreeing to assume these costs upon completed sale of the property.
The seller states that he is unaware of any material defects that are not easily observable and haven’t already been disclosed.
The seller agrees to give the buyer and a home inspector access to the property in order to conduct a full home inspection.
The buyer has five days from end date of the inspection period to contact the seller regarding any repairs that need to be made.
Seller must convey a marketable title to the buyer within a reasonable time frame.
If the buyer doesn’t deliver a contingency notice in a timely manner, it will be rendered null and void.
It also states that handwritten or typed modifications take precedence over pre-printed terms.
In the event that the seller defaults, the buyer can receive back his deposit. Should the buyer default, the seller is entitled to retain any deposits, and he has the option to sue.
The buyer and seller have 30 days from the date a dispute arises to come to an agreement on their own. If they can’t, the Escrow Agent will assign the dispute to a neutral party for binding arbitration.
The broker is released from any liability as a result of the seller’s failure to disclose material or other facts.
Make the buyer aware of his responsibility to apply for a mortgage as soon as the offer is accepted.
If it’s possible, call the seller’s agent while your buyer is still there, and set up an appointment to present the offer.