Real Estate Contracts Flashcards
What is a real estate broker?
A real estate broker is someone typically employed by a seller to handle the sale of real property under a listing agreement.
What is an open listing agreement?
A seller may use other brokers to sell listed property and commission goes to whichever broker finds buyer during listing period.
What is an exclusive agency contract?
A seller can find buyer and if seller does so without broker’s assistance, broker receives no commission.
What is an exclusive right to sell?
Commission will go to the broker if property is sold during the listing period no matter who finds the buyer.
When is a real estate contract executed?
When the seller promises to deliver marketable title and the buyer promises to pay the purchase price.
When does a promise to provide marketable title need to be performed?
Not until closing or a reasonable time thereafter unless time is of the essence.
When is time of the essence required?
The contract specifically states that time is of the essence, circumstances indicate that this was the intention of the parties or one party gives the other party notice within a reasonable time before closing.
When is title marketable?
If it is reasonably free from doubt and under no threat of litigation such that a reasonable person would accept and pay for it.
What renders a title unmarketable?
Covenants, easements, leases, liens, gaps in chain of title, boundary disputes, existing zoning violations, adverse possession
What is a deed?
A legal instrument that transfers ownership of real property from the grantor to the grantee
When is a deed valid?
When it is in writing, signed by the grantor, has the identity of the grantor and the grantee and that grantee exists, describes the property and includes words of transfer.
What are the elements of a real estate contract?
The contract must be in writing, be signed by the party to be charged, and contain essential terms (including the identify of the parties, price, and a description of the land.
What is the part performance exception?
The part performance exception applies as an exception to the written contract requirement if a claimant takes possession of the property and makes payment in full of a substantial part of the price or substantially improves the land.
Does a seller of a home have to disclose defects?
No, unless they are not obvious, he knows or should know of them, and the defect is serious. But, the seller cannot actively conceal defects.
What is the doctrine of equitable conversion?
The buyer’s interest is in the real property so if something happens to the real property after the contract is signed the risk of loss remains on the buyer.
