Common Contract Mistakes Flashcards
How should a party’s name be listed on the sale contract?
Using the person’s full legal name
What is true about using the street address in the property description paragraph?
The street address is never enough. The property paragraph must contain the full legal description of the property.
What can happen if a licensee forgets to check some of the check boxes on a contract?
It can cause delays in the transaction or bad feelings between the parties. In addition, the licensee could be viewed as careless or incompetent.
What are the two common mistakes licensees make when dealing with addenda?
Check off an addendum in the paragraph and then not attach it.
Attach an addendum to the contract without indicating in paragraph 22 that it is being attached.
What are the definitions of real property and personal property?
Real property is ownership of real estate and the bundle of rights associated with owning the real estate. Personal property is ownership of anything that is not real estate, and the rights associated with owning the personal property item.
How can real property be changed to personal property?
Severance is the conversion of real property to personal property by detaching it from the real estate.
When do issues regarding real and personal property usually come into focus?
During the final walkthrough of the property right before closing
What is a cloud on title?
Any irregularity in the chain of title of property that would give a reasonable person pause before accepting a conveyance of title
Some of the more common mistakes licensees make when filling out the TREC contracts involve errors that happen when dealing with:
The names of the parties to the contract The property description Checkboxes in paragraphs The Special Provisions paragraph The Default paragraph Signatures The contract effective date Addenda
One of the most frustrating areas of selling real estate has to do with
dentifying whether or not a particular item conveys with the property. Because this can become such a contentious situation, a wise listing licensee will exert extra effort to be sure he or she has a complete list of those items that will stay with the property and those that will not.
Another common area of concern deals with the seller’s requirement to deliver a
marketable title at closing. Although many of title problems can be taken care of relatively quickly, any lawsuit will take time and probably delay the culmination of the transaction.
Any agent acting properly should(1):
Keep the contract neat.
Be sure that all the blanks are filled in correctly.
Always use full legal names for the parties of a contract.
Always double-check all the numbers and figures.
Always double-check all the dates.
Be sure the clients initial each page and any changes and sign the back.
Be sure the clients receive a copy of everything signed and as soon as possible get them an original.
Any agent acting properly should(2):
Be sure all addenda necessary to the contract are attached to the contract.
Always double-check the legal description to be sure it was written correctly.
Explain the contract to the clients but should not interpret the legal ramifications of a contract.
Not promise that real estate contracts do anything except put the desires of the parties regarding the real property in writing.
Not accept poorly written contracts from other real estate salespeople because it puts all agents at risk.
Severance
is the conversion of real property to personal property by detaching it from the real estate, such as by cutting down a tree, detaching a door from a shed, or removing an antenna from a roof.
Affixing
or attachment, is the act of converting personal property to real property by attaching it to the real estate, such as by assembling a pile of bricks into a barbecue pit, or constructing a boat dock from wood planks.
