Ch. 23 -Due Diligence

Question 1

Due diligence

Answer 1

The concerted and continuing efforts of an agent employed to meet the objectives of their client, the agents promise given in exchange for the clients promise to pay a fee.

Question 2

Material fact

Answer 2

A fact that if known, might cause a prudent buyer or seller of real estate to make a different decision regarding what price to offer or demand for a property or whether to remain in a contract or cancel it.

Question 3

Best effort obligation

Answer 3

Obligations under an open listing requiring the agent to take Reasonable steps to achieve the objective of the client but requiring no affirmative action until a match is located at which point due diligence is required.

Question 4

Property profile

Answer 4

Airport from a title company providing information about the properties ownership encumbrances, use restrictions and comparable sales data.

Question 5

Natural hazard disclosures NHD

Answer 5

A report provided by a local agency or an HD vendor and used by sellers and sellers agents to disclose natural hazards which exist on the property held out for sale.

Question 6

What are some steps a broker and their agent may undertake to for fill their employment responsibilities over to the client?

Answer 6

• A property profile of the sellers title for my title company in order to identify all owners needed to list, sell and convey the property.
• A transfer disclosure statement TDS, also known as a condition of the property disclosure sheet, filled out and signed by the seller.
• A home inspection report prepared by a home inspector paid for by the seller and attached to the TDS before the sellers agent signs the TDS.
• A natural hazard disclosure On the property from a local agency or a vendor of NHD REPORTS, Paid by the seller, And reviewed and signed by the seller and the seller’s agent.
• An annual property operating data sheet APOD covering the expenses of ownership and any income produced by the property, filled out and signed by the seller, together with a rent roll and copies of lease forms which the owner uses, to include in the marketing listing package only after reviewing the sellers data.
• Copies of all the covenants, conditions and restrictions, disclosures and assessment data from any homeowners association involved with the property.
• A termite report and clearance paid for by the seller.
• Any replacement or repair of defects noted in the home inspection report or on the TDS, as authorized and paid for by the seller.
• And occupancy transfer certificate including permits or the completion of retrofitting required by local ordinances, paid for by the seller.

And 8 more….to be continued

Question 7

Marketing Package

Answer 7

A property information package headed to the perspective buyers containing disclosures compiled on the listed property by the seller’s agent.

Question 8

Sellers net sheet

Answer 8

A document prepared by seller’s agent to disclose the financial consequences of a sale when setting the listing price on acceptance of the buyers price in a purchase offer.