29-31 Flashcards
Statute of Frauds
A state law, based on an old English statute, requiring certain contracts to be in writing and signed before they will be enforced at law, e.g., contract for the sale of real property.
Commingling
The illegal mixing of personal funds with money held in trust on behalf of a client.
Conversion
The unlawful appropriation of another’s property, as in the conversion of trust funds.
Earnest Money
cash held by a third party to guaranty that the buyer completes the transaction.
Addendum
Additional pages of material that are added to and become part of a contract.
Agreement of Sale
A written agreement or contract between seller and purchaser in which they reach a “meeting of mind” on the terms and conditions of the sale. The parties concur; are in harmonious opinion.
Counter Offer
A response to an offer to enter into a contract, changing some of the terms of the terms of the original offer. A counter offer is a rejection of the offer (not a form of acceptance), and does not create a binding contract unless accepted by the original offeror.
Letter of Intent (LOI)
Generally an agreement to agree. It outlines the terms between parties who have not formalized an agreement into a contract. LOIs are generally not binding and unenforceable.
Offer and Acceptance
Elements required for the formation of a legally binding contract. The expression of an offer to contract on certain terms by one person (the “offeror”) to another person (the “offeree”), and an indication by the offeree of its acceptance of those terms.
Specific Performance
An action to compel performance of an agreement, e.g., sale of land as an alternative to damages or rescission.
Novation
The substitution or exchange of a new obligation or contract for an old one by the mutual agreement of the parties.
Compensatory damage
meant to compensate the wronged party. It’s a monetary award to make the party whole again. Compensatory damages are limited to money actually lost during a transaction that went bad.
Liquidated Damages
A sum agreed upon by the parties to be full damages if a certain event occurs. In situations where compensatory damages cannot be calculated, a court can award liquidated damages
FHA Loan Contingency Exhibit (F407
Most home mortgage loans are insured by the FHA, the Federal Housing Administration.
Lead-based Paint Exhibit (F316
If the home or any structure on the property being sold was constructed prior to 1978, the seller must complete and attach this lead-based paint disclosure form.
Seller’s Property Disclosure Statement (F301, F304, F307, or F310
This disclosure statement gives the seller an opportunity to identify any and all material defects in the property. The purpose of this document is to provide transparency, so the buyer knows what they are getting when they purchase the property.
Closing Attorney Acting as Holder of Earnest Money Exhibit (F510)
In Georgia, only attorneys can act as closing agents for real estate transactions. It is a common practice for the closing agent to also hold the earnest money. When they do so, this exhibit must be completed and attached to the agreement
Credit
A bookkeeping entry on the right side of an account, recording the reduction or elimination of an asset or an expense, or the creation of or addition to a liability or item of equity or revenue.
Debit
That which is due from one person to another.
The Closing Disclosure
sometimes called the CD—lays out all the finances of the sale. The Closing Disclosure identifies every expense in the deal and shows who paid what.
Proration
Adjustments of interest, taxes, and insurance, etc., on a pro rata basis as of the closing or agreed upon date.
Closing
Process by which all the parties to a real estate transaction conclude the details of a sale or mortgage. The process includes the signing and transfer of documents and distribution of funds.
Marketable Title
– Title which a reasonable purchaser, informed as to the facts and their legal importance and acting with reasonable care, would be willing and ought to accept.
Chain of Title
A history of conveyances and encumbrances affecting the title from the time the original patent was granted, or as far back as records are available, used to determine how title came to be vested in current owner. Linking to buyer to buyer to buyer.
Abstract of Title
A summary or digest of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title
Opinion of Title
An attorney’s written evaluation of the condition of the title to a parcel of land after examination of the abstract of title. The attorney’s title opinion is not a guaranty of title—it is just the attorney’s judgment about whether marketable title exists, based on the evidence in the land records
Title Insurance
Insurance to protect a real property owner or lender up to a specified amount against certain types of loss, e.g., defective, or unmarketable title.
Real Estate Settlement Procedures Act (RESPA
A federal law requiring the disclosure to borrowers of settlement (closing) procedures and costs by means of a pamphlet and forms prescribed by the United States Department of Housing and Urban Development.
