Chapter 14 - After Close of Escrow Flashcards
Referral fee
Paid by one agent for referring a client.
When escrow closes, the referring agent may be paid a referral fee to compensate for the referral
Finder’s fee
Paid from an agent to a non-licensee for introducing the agent to the client.
A non-licensee cannot solicit clients for the agent, the non-licensee can only introduce the agent to the potential client.
Advance fee agreement
Allows a real estate agent to accept a payment in advance (prior to services rendered) with no guarantee of a successful outcome.
Advance fee contracts must include:
- Total amount of compensation or fee to be paid to the broker
- A complete description of the services to be provided by the broker
- Date and terms for payment of the compensation
Company Dollar / Office Operating Cash
The amount of money a real estate broker has after paying commissions to other brokers and the real estate broker’s salespeople.
Desk Cost
Total costs are divided by the number of agents in the office to derive the desk cost per agent.
Includes space rent, common area maintenance (CAM) charges (used on triple net leases to pass through expenses to be paid by tenants in the building), electrical, janitorial, and other overhead costs necessary to run a business.
Seller Occupancy Addendum
Added to the purchase agreement for the 1-2 days the seller is “renting” the property from the buyer.
The buyer should consider home insurance ramifications of having a tenant (seller) in the property for a period after close of escrow.
Interim Occupancy Agreement
Agreement that allows the buyer to move into the property before close of escrow.
Errors & Omissions (E&O) Insurance
Covers the real estate salesperson and broker for negligent misrepresentations in which the agent merely missed the item in question.
E&O insurance DOES NOT cover for intentional misrepresentation (fraud)
Home Warranty Insurance Policy
Provides the buyer with a means of repairing broken mechanical items that occur AFTER close of escrow.
Insulates the seller and real estate agents from any potential liability that may be asserted by the buyer against the seller.
Home warranty companies will generally NOT pay for preexisting conditions if the item was already in disrepair prior to close of escrow.
Title Insurance Policy
Issued at close of escrow and protect the buyer and/or lender from the title defects that occurred before the buyer owned the property.
Chain of Title / Chain of Recorded Title
The recorded history of ownership interests that affect the subject parcel of real property, including encumbrances and other matters relating to the title to a property.
Abstract of Title
A list of every person who has owned a property. Not normally used in California.
Quiet Title Action
Court action to remove a cloud on the title to real property.
Blockchain Technology and Distributed Ledger Systems
Places information on multiple computers that are located all over the world.
Each computer can be used to check the other computers to verify the information stored on each of the computers.
May be the future for recorded documents such as real estate title information.
