Chapter 7: Specific Real Estate Contracts Flashcards
Under a contract for deed (also known as a land contract), the seller
retains naked title to the property until the property is paid for in full by the buyer.
The seller (vendor) in a land contract (seller-financed transaction) releases most of the bundle of sticks to the buyer (vendee) but retains naked title until the buyer has paid the seller the full contract price.
John has entered into a five-year lease that provides for an annual rent increase of $500 per month. John’s agreement is known as:
a Graduated Lease.
A lease that specifies a rent increases schedule at the time the lease is signed is called a graduated lease.
An agreement that binds the seller to pay a commission regardless of who sells the property is known as:
an Exclusive Right to Sell Listing
In an exclusive right to sell listing, the seller employs one broker for a specific period. That broker will be entitled to a commission regardless of how the listing sells or by whom. Another licensee can sell the property, the seller can sell the property, or the listing licensee can sell it. In each case, the listing broker will be paid a commission
A unilateral agreement to market and procure a buyer for a property that establishes an agency relationship with a homeowner is known as
a Listing Agreement.
The listing agreement is the employment contract between a broker and a property owner whereby the broker is hired as an agent to find a ready, willing, and able buyer for the purchase of the property with acceptable terms.
The purpose of the Multiple Listing Service (MLS) is to:
enable real estate agents to share information on their listings with other real estate agents.
The MLS was formed to enable member real estate agents to share information on listed properties with other members.
Harry purchased a duplex that has one unit leased by Mary for seven more months. Harry’s purpose for purchasing the duplex was to occupy one unit and his brother, Kyle, the other. Upon closing, Mary:
has the legal right to occupy the unit for the balance of her lease term.
A purchase of a property occupied under a valid lease purchases the property subject to that lease.
When a tenant transfers the right to possess a leased property to another for less than the unexpired term of the lease, __________ has occurred.
a sublease
In a sublease, the sub-tenant is liable to the original tenant for the rent, who, in turn, is liable to the landlord.
A real estate contract can be terminated with no duty of further performance on the part of either party if:
-an event occurs creating the impossibility of performance.
-there is a contingency which is not satisfied.
-either party declares bankruptcy prior to closing.
All of the above
All of the occurrences terminate a contract without prejudice to either party.
To be the procuring cause of a sale occurring, a real estate agent must:
be the person primarily responsible for bringing a ready, willing, and able buyer who enters into a sale agreement with the seller.
The procuring cause of the sale is the person who brings the buyer who enters into a sale agreement.
A lease created to include certain expenses on a property in addition to a stipulated monthly rate is called
a Net Lease
With a net lease, the tenant pays a set amount of rent and some or all of the expenses of operating the building for maintenance, repairs, etc.
