Multi-Board Residential Real Estate Contract Flashcards
How is the property defined in the Contract?
1) Legal description from the registry of deeds
2) By address and location
Define Fixtures:
1) what is included in the property
2) What is excluded in the property
3) Warranties Included
What is included in the purchase price section?
1) Amount of Earnest Money already paid
2) Down Payment paid
3) Lists the total price
4) Lists who gets the interest while the money was in escrow (usually split 50/50)
What happens to the earnest money and down payment until the contract is closed?
Held by a non-fiduciary 3rd party for the benefit of both parties. Often an Escrow Agent or a lawyer who has no interest in either party.
What is the most important paragraph in the real estate contract?
The Mortgage contingency
What does the mortgage contingency do?
It states that the buyer is required to get a mortgage.
It also has a clause that if the buyer cannot secure a mortgage that then they must inform the seller in a timely manner. If the buyer cannot secure a mortgage and fail to inform the buyer in a timely manner, the section will be binding and enforceable whether they have the mortgage or not.
This section is often precise and very specific.
What is the Proration section?
Describes what occurs with the money already paid on the price of the house.
What is allowed under the Attorney review section?
Time is given for the buyer and seller to have their attorneys review the document and ensure that it is up to their desires and standings. This has a time limit, usually between 7 and 10 days.
What does the inspection contingency allow?
1) The buyer can walk their land to ensure there is no visible issues.
2) Buyer can hire an inspector to check the property and ensure that it is up to the contract and agreement. This private inspector ensures that:
a) No hazards or hazardous waste
b) check for bug infestations, radon, septic systems, etc.
3) Allows the seller time to fix the defects
4) Language should include “time is of the essence” to mark time, if it does not then a reasonable amount of time is given to inspect the property and fix the defects.
What occurs in the “seller representation” section?
Lists the different restrictions and the agreements on defects.
Has a contingency about negotiating and performing in good faith.
What is presumed in every negotiation?
Good faith
What is “As is” condition?/
If this contingency is included, it means that the buyer accepts the land and title as it stands.
Allows that if the buyer inspects the land within the time period, and is unsatisfied, they are allowed to change or renegotiate the agreement. They can also nullify the agreement.
