Real Estate Contracts Flashcards
What are real estate contracts and what do they include?
contract that Confirms intent to convey legal property. Includes the basic terms, which are parties, price, description of the property, conditions we want, and must be signed by the party to be CHARGED.
Do Real Estate Contracts need to be in writing?
Yes, because of the statute of frauds. Anytime there is land the SOF applies.
However, there is an exception for Part Performance for when buyer provides some or all of the purchase price and makes improvements to the land or takes possession.
What is equitable conversion?
It takes place when you sign the real estate contract. Your equitable interest transfers to the buyer along with the risk of loss.
Equitable Conversion Example
If we sign a contract today and a hurricane hits tomorrow, the buyer will bear the risk of loss
Can the buyer sell the house to another person after the R.E.C. is signed?
No, because of the buyers equitable interest in the house.
What is the implied promise to convey marketable title?
Marketable title free of any encumbrances (defects).
It is an implied promise that Im going to give you the property free of any liens, covenants, mortgages, zoning violations, etc.
Is time generally of the essence?
No, unless stated otherwise in the contract.
If it is stated and it happens after the deadline then that is grounds for breech.
What is merger?
On the day of closing, the contents of the contract merge into the deed the day the deed is signed.
So, if you violate something from the contract after the deed is signed, you have to sue on the deed itself.
What happens if there is a breech of the R.E.C.?
You can get money damages, or, in a land contract, maybe specific performance.
Specific performance is an equitable damage, which happens when money won’t solve the issue. You want that specific land/house, so you will need to get that house.
What is the duty to disclose?
Sellers must disclose any physical defects that cannot be seen by the buyer. This includes material defects. If they can be seen or are known then no need to disclose.
