LESSON 7: PROMULGATED AGENDA, NOTICES, OTHER FORMS Flashcards
What is the Sale of Other Property Addendum used for?
The Sale of Other Property Addendum is used when the buyer cannot purchase the new property unless their current property is sold and closed. This is typically when the buyer needs funds from the sale of their current property or when the new lender will not approve a loan without paying off the existing loan.
What is stated in Paragraph A of the Sale of Other Property Addendum?
Paragraph A gives a deadline for when the funds from the sale of the existing property must be received. It also states that “time is of the essence” for this addendum.
What does Paragraph B of the Sale of Other Property Addendum say about backup offers?
Paragraph B allows the seller to continue marketing the property for backup offers. If the seller accepts a backup offer, they must notify the first buyer (Buyer 1), who can either waive the contingency or the contract will terminate.
What does Paragraph D caution the buyer about?
Paragraph D cautions the buyer not to waive the contingency unless they are sure they can still close if the first property does not close, as waiving the contingency could result in default.
What is the purpose of the Addendum for Back-Up Contract?
The Addendum for Back-Up Contract allows the seller to negotiate with a second buyer (back-up buyer) in case the first buyer’s transaction falls through. This allows the back-up buyer to have a contract in place if the first contract terminates.
What does Paragraph A of the Addendum for Back-Up Contract state?
Paragraph A states that the back-up buyer will put up earnest money and option money and wait to see if the first contract terminates. If the first contract terminates, the back-up contract will become active.
What happens if the first contract does not terminate in the Addendum for Back-Up Contract?
Paragraph B states that if the first contract does not terminate by the deadline, the back-up contract will terminate and the earnest money will be refunded.
What does Paragraph C say about the back-up buyer’s rights?
Paragraph C states that if the first contract terminates, the seller must notify the back-up buyer immediately, and the effective date of the back-up contract will be amended to the date the back-up buyer is notified.
What does Paragraph D specify about the buyer’s termination rights?
Paragraph D specifies that if the buyer has the unrestricted right to terminate the Back-Up Contract, the right to terminate begins on the original effective date and continues after the amended effective date for the agreed number of days.
What does Paragraph E of the Addendum for Back-Up Contract say?
Paragraph E states that “time is of the essence,” meaning that deadlines must be strictly adhered to in the back-up contract.
What is the purpose of the Addendum for Reservation of Oil, Gas, and Other Minerals?
The Addendum for Reservation of Oil, Gas, and Other Minerals informs the buyer about the mineral rights related to the property. It includes an important notice that the mineral rights might affect ownership and that parties should consult an attorney if there are concerns about the mineral estate.
What does the “Mineral Estate” include?
The Mineral Estate includes oil, gas, and other minerals in and under the property, royalties, executive rights, exploration and development rights, and all related rights and benefits.
What is not included in the Mineral Estate?
The Mineral Estate does not include water, sand, gravel, limestone, building stone, caliche, surface shale, near-surface lignite, and iron, but it does include the reasonable use of these materials for mining, drilling, or mineral extraction.
What does Paragraph C of the Mineral Addendum address?
Paragraph C provides the seller with the option to reserve rights to enter the property to access the minerals. It also notes that if the seller does not own all the mineral rights, other parties might have the rights of entry.
What happens if the oil company damages the surface estate?
The surface owner can sue the oil company only if the damage is beyond what was reasonably necessary, if the company violated the accommodation doctrine, or if there was negligence.
What is the “Accommodation Doctrine”?
The Accommodation Doctrine requires the oil company to accommodate the surface owner’s use of the property when possible, unless there is no reasonable alternative.
What rights does the surface owner have in mineral leases?
The surface owner should negotiate provisions in the mineral lease to protect their interests, such as location of wells, restoration of the property after drilling, and inclusion of a liquidated damage clause for surface damages.
What is the Notice of Buyer’s Termination of Contract used for?
It is used when the buyer has the right to terminate the contract for specific reasons as outlined in the contract.
What is a mutual termination of contract?
A mutual termination occurs when both parties agree to release each other from the contract and are free from any liability.
What risks are involved in purchasing coastal property?
Purchasing property on the coast, especially near the Gulf Intracoastal Waterway, involves risks such as erosion, storms, and the state’s right to remove structures if they encroach on the beach area due to erosion.
What should purchasers do before buying coastal property?
Purchasers should research erosion rates, consult an attorney, and understand the risks before signing a contract for coastal property.
What are the benefits of buying a Beachfront Home?
Immediate access to the beach for activities like swimming, fishing, and family fun.
What are the benefits of buying a Beach Home on a Canal?
Easy access for boating, boat lift for storage.
Why is it important to investigate the environment of a neighborhood when buying a home?
It helps understand the area’s appeal and safety. Driving through the neighborhood during busy times is recommended.
What is the role of a Home Owners Association (HOA) or Beach Property Owners Association (BPOA)?
They protect the property’s value by enforcing rules, ensuring the upkeep of the area.
What should buyers consider regarding boat launches?
Buyers should check for 24-hour access, availability during low tide, and whether it’s public or private.
What is the importance of beach access and beautification?
Private or public beach access is important, and buyers should verify who is responsible for beach maintenance, reviewing city, state, and federal regulations.
What should buyers know about water supply and sewer systems?
They should check if the property is served by a municipal utility district, has its own water well, and the condition/age of the well and septic system.
Why should buyers consider structural, pest, and environmental or geological inspections?
To ensure the home is free from termite damage, pest issues, and soil erosion.
What should buyers know about offshore fishing?
How long it takes to access the Gulf of Mexico and whether the path is deep enough for their boat.
What is the significance of “Subdivision Information” in real estate transactions?
It includes bylaws, restrictions, and rules of the association, and is important to understand the financial responsibilities and property usage.
What is the “Short Sale” process in real estate?
A home is sold for less than the mortgage balance, with the lender agreeing to accept the reduced sale price.
What are the key points of the Short Sale Addendum for sellers?
Describes net proceeds and protects the seller if the lender doesn’t accept the offer.
What happens in a “Short Sale” transaction?
The servicer allows the borrower to sell the property at a loss, with proceeds going toward paying off the mortgage.
What is a Deed-in-Lieu of Foreclosure (DIL)?
The borrower voluntarily transfers ownership of the property to the mortgage company in exchange for release from the mortgage.
What is the benefit of refinancing a mortgage?
It can lower the interest rate or change terms, making payments more affordable without negatively impacting the credit score.
What is a Repayment Plan?
An agreement to pay past-due mortgage amounts over time, helping bring the mortgage up to date.
What is Forbearance in mortgage terms?
A temporary suspension or reduction of mortgage payments, allowing time to improve financial circumstances.
What is a Modification in mortgage terms?
An agreement to change the original mortgage terms to reduce monthly payments or adjust the loan length.
What are the benefits of a Short Sale?
It can reduce mortgage debt and help the borrower recover their credit score faster than foreclosure.
What is the purpose of HUD-approved housing counseling agencies?
They offer free help to homeowners to negotiate with lenders and avoid foreclosure scams.
What should homeowners beware of to avoid foreclosure rescue scams?
Be cautious of individuals offering to save homes for a fee, or those suggesting signing over the deed. Always verify the legitimacy of any organization.
Why is it important to work with a real estate professional or title company?
To ensure a safe transaction and avoid issues like fraud, scammers may suggest skipping these professionals.
What should be included when preparing the Seller’s Net Sheet?
Include all loan amounts, payoff figures, past due taxes, HOA dues, and other relevant costs from the seller’s initial interview.
What happens when a seller’s net is negative and they can’t pay at closing?
The transaction may depend on the lender’s approval of a short sale, which may be considered if the seller is in a hardship situation.
Can a seller be trying to modify or refinance while pursuing a short sale?
No, the seller must first explore alternatives like staying in the home before considering a short sale, foreclosure, or deed in lieu of foreclosure.
What forms may an agent include in their listing package for a short sale?
The Request for Mortgage Information (TAR 1413) and Seller’s Authorization to Release and Advertise Certain Information (TAR 1412).
Why is a short sale better than a foreclosure for a seller?
A short sale may have less of an impact on the seller’s credit score compared to a foreclosure, which can drop the score by up to 200 points and remain on the report for 7 years.
What are the two types of short sales?
- The lender forgives the debt, considered debt forgiveness but potentially taxable. 2. The lender requires the buyer to repay the difference, so the debt is not forgiven.
What is the obligation of a licensee helping a homeowner negotiate a short sale?
The licensee must represent the homeowner, not the lender, and communicate with the lender only at the direction of the client, maintaining confidentiality.
What should a licensee do once they have a listing for a short sale?
Contact the lender as soon as possible and persist in reaching the decision-maker, such as the Loss Mitigation or Loan Work Out Department.
What must a buyer understand when purchasing a short sale?
The process will take time, and the lender will decide based on financial benefit, either approving the sale or moving forward with foreclosure.
What document should a buyer review when considering a short sale?
The short sale addendum should be reviewed with the buyer.
What is required of real estate professionals regarding the Consumer Protection Notice?
Brokers, sales agents, inspectors, and ERW agents must display the notice in a visible location at their office, website, and social media profiles.
What is the minimum font size for the Consumer Protection Notice on a website?
The text must be at least 10-point for real estate agents and 12-point for brokers.
How should a social media profile display the Consumer Protection Notice?
Include a direct link in the profile bio or use a “link-in-bio” tool, or post an image of the notice on platforms like Instagram.
What is the fee for depositing to the trust account for an original license?
A $10 fee is required to deposit into the trust account for an original license or certificate of registration.
How is the trust account managed by the commission?
The commission holds and invests the money in the trust account, ensuring liquidity and using interest earned to support the account.
What happens if the balance in the trust account exceeds $3.5 million?
The excess money is transferred to the general revenue fund.
