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Undeleted > Real Estate Sales Contracts & Code of Ethics > Flashcards

Real Estate Sales Contracts & Code of Ethics Flashcards

1
Q

Reality of consent includes what factors?

A
  1. Menace
  2. Duress/Undue Influence
  3. Mistake of Fact
  4. Misrepresentation or fraud
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2
Q

Harrassment

A

Menace

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3
Q

Someone coercing another person (blackmail)

A

Duress/Undue influence

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4
Q

Buyer/Seller make an error of fact

A

Mistake of Fact

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5
Q

Lying

A

Misrepresentation or fraud

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6
Q

Sellers talk up the house to enhance the appeal of house

A

Puffery

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7
Q

“buyer beware” – applies to the sale of homes – This is changing over time.
Alabama; NOT in all states

A

Sellers “Duty to Speak”

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8
Q

Buyer must diligently seek information about the property such as physical condition, title problems and zoning issues

A

Buyers “Duty to Seek”

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9
Q

Initial step in the contract

A

offer

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10
Q

An offer must be

A

Definite
Complete (location, price, addendums, signatures, etc.)
Communicated and Delivered

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11
Q

Final step of the contract (sign-off)

A

Acceptance

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12
Q

This is only done by the one(s) whom the offer was made.
Unconditional and Identical to the offer
Communicated and Delivered

A

Acceptance

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13
Q

Counter offer includes

A

Changes in Price
Physical Items you want
Closing Costs (Common=Seller Pays)

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14
Q

When would we have an illegal contract?

A 
Property Flipping (Know State Laws)
Inflating Price
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15
Q

The promises and actions of the consideration must be legal.

A

Contract and payment

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16
Q

The mutual exchange of promises and actions stated in the agreement

A

Consideration

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17
Q

What must be exchanged in a real estate contract?

A

Money

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18
Q

The guiding principal is whether the person understands the nature and consequences of the agreement.

A

Competent parties

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19
Q

What is generally in a R. E. Sales Contract?

A

Parties and Property
Financial Section
Contingency Clauses
Miscellaneous Clauses

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20
Q

What actions end a contract?

A
  1. Discharge of the contract
  2. Nonperformance of the contract
  3. Breach of contract
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21
Q

What is it called when someone breaches a contract and gets to keep earnest money?

A

Liquidated Damages (Seller)

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22
Q

Mutual decision to not do contract - type of contract breach

A

Recission

23
Q

A contract where you do not record the deed when the buyer purchases the property; Buyer makes payments and gets title at the end when full payment made

A

Land sales contract or installment contract or contract for deed

24
Q

Lease payments that go toward your principle

A

Lease-option contract

25
Q

Take over the Seller’s loan, occurs when:
Interest Rates are high
Buyer might not be able to qualify for a loan

A

Loan assumption

26
Q

Most common type of financing ex. land

A

Seller financing

27
Q

Their purpose is to help realtors become successful and profitable in their business.

A

National Association of Realtors

28
Q

Education programs
Government advocacy
Research Reports
Conferences and networking

A

Benfits of NAR

29
Q

In general, it is “moral right and wrong” or “duty and obligation”.

A

Ethics

30
Q

In real estate sales and brokerage, it is the morally correct business conduct.

A

Ethics in real estate

31
Q

Which takes precedent, ethical standards or the law?

A

Law

32
Q

The NAR has relationships with what 3 types of people?

A

Clients and Customers
General Public
Other Realtors

33
Q

Realtors shall avoid misrepresentation, exaggeration or concealment of pertinent facts about the real estate property and its transaction.

A

Article 2 – Duties to Clients and Customers

34
Q

Adverse factors have to be _____________ ?

A

Readily apparent

35
Q

Realtors must protect their client and promote their interests. Further, they must treat others honestly.

A

Article 1 – Duties to Clients and Customers

36
Q

Realtors shall cooperate with other agencies except when cooperation is not in the client’s best interest. What do realtors have to do for other agencies?

A

Article 3 – Duties to Clients and Customers

  1. Supposed to put listing in MLS
  2. Post accurate information about property
    sq. ft, bed and baths, etc.
  3. Provide times for other realtor to show the property (Ex. Lockbox)
37
Q

Realtors shall not present offers or purchase property for themselves, their family or firms without letting the other party know their designation. This must be in writing and provided before any contract is made. Why?

A

Article 4 – Duties to Clients and Customers; The realtor must be up front so the seller cannot be taken advantage of

38
Q

Realtors shall not provide professional consulting services or provide values in regards to their own property without disclosing the interest. *Also must be in writing

A

Article 5 – Duties to Clients and Customers

39
Q

Realtors must disclose if they are profiting or receiving a rebate or commission on “outside” expenditures related to their client’s transaction. Where could realtors make a profit on each deal?

A

Article 6 – Duties to Clients and Customers

Examples: Referral fees, home inspector, termite control people, mortgage lender, exterminator, surveyor, appraiser, attorney, lenders

40
Q

Realtors may not accept compensation from more than one party to the transaction without full consent and disclosure of the clients. Why?

A

Article 7 – Duties to Clients and Customers

Conflict of interest if the buyer tries to pay you and you don’t tell the seller.

41
Q

Realtors shall keep escrow and/or trust monies in a special account in an appropriate financial institution. Why can’t they keep it in their bank accounts?

A

Article 8 – Duties to Clients and Customers

People will spend it

42
Q

Realtors must write listing agreements, leases and purchase contracts in clear language and must provide a copy to clients upon signing.

Why must they provide a copy? Why buyer and seller

A

Article 9 – Duties to Clients and Customers

Why buyer and seller?
-So they know nothing has been altered or changed, and you have your copy to prove what was right.

43
Q

Realtors may not discriminate based upon race, color, religion, sex, handicap, familial status or national origin in their services.

A

Article 10 – Duties to Clients and Customers

Age is not listed.
You can only discriminate on age and can only discriminate on age in 1 way: retirement community

44
Q

Realtors shall provide truthful advertising, marketing and communications and their status must be readily apparent.

  1. Can realtors offer inducements (gifts) for business?
  2. Can they advertise a different price than the listing agreement?
A

Article 12 – Duties to the public

  1. Yes, can’t “go crazy” with it, no BIG kickbacks. Can offer small inducements.
  2. No, must be obedient to seller.
45
Q

Can listing brokers claim they sold a property even if a different realtor “made” the sale?

A

Yes > Where does this matter? Perception thing even if didn’t bring the buyer they were still part of deal so can say they made sale.

46
Q

Do realtors have to list their brokerage firm in any advertising?

A

Depends on situation (why?) > magazine, newspaper, FB must show firm you work for.

47
Q

Can the realtor use differing website domain names than their brokerage company name?

A

Yes must have brokerage name on it.

48
Q

Can realtors try to advertise and sell their own property without listing it?

A

Realtors can do for sale by owner, cannot advertise with brokerage company.

49
Q

Can a realtor solicit business from a person with a real estate sign in their yard or a person that is listed with the MLS?

A

Depends (why?) > you can if the other realtor wont tell you when listing expires. You have a right after the listing expires. If they don’t tell you the date then you can, if they don’t tell you the date you cant.

50
Q

Can a realtor place a sign in the yard of the customer at any time?

A

No must have permission

51
Q

Can a buyer’s broker make a seller pay more than one commission

A

No they split commission in original listing contract.

52
Q

Does a homeowner have to use a broker on a real estate deal if they have used that broker for multiple transactions in the past?

A

No if they did a bad job you have the right to use someone else.

53
Q

Can a realtor send out mass mailings to the public?

A

YES

54
Q

In the event of contract or other disputes between member firms, realtors must submit to _______ rather than _____.

A

arbitration rather than litigation.

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