Unit 10 - Sales Contracts and Practices

Question 1

A form often used by REALTOR/licensees and/or North Carolina attorneys to establish a legally binding agreement between the buyer and seller concerning the terms of purchase or transfer of residential real property.

Answer 1

NCBA/NCAR 2-T Offer to Purchase and Contract (OPC)

Question 2

North Carolina version of the federal E-sign legislation that validates electronic contracts, documents, and signatures.

Answer 2

Uniform Electronic Transactions Act (UETA)

Question 3

A rule of law stating that once written acceptance is place in control of the mailing service, and out of the control of the offeree, it is considered accepted - not when the acceptance is actually received by the offeror.

Answer 3

mailbox rule

Question 4

termination of offers (5)

Answer 4

1. Offeree rejects the offer and/or creates a counteroffer
2. Offeree fails to accept within the prescribed time stipulated in the offer
3. Within a reasonable time, if a time of acceptance is not prescribed
4. Prior to acceptance, if the offeror communicates a revocation of the offer
5. By the death of the offeror or offeree

Question 5

An offer submitted to the property owner with knowledge that the owner us already under contract

Answer 5

backup offer AKA

secondary offer

Question 6

A contract for the sale of real estate financed by the seller whereby the purchase price is paid in periodic installments by the purchaser, who is in possession of the property even though legal title is retained by the seller until a future date, which may not be until final payment

Answer 6

installment land contract AKA
contract for deed AKA
land contract AKA
land sales contract

Question 7

An agreement between the property owner and the possible buyer, secured by the payment of an option fee, to buy or not buy property within a specific time period at terms that have been negotiated in the underlying contract

Answer 7

option AKA

option to purchase AKA option contract

Question 8

owner

Answer 8

optionor

Question 9

prospective purchaser or lessee

Answer 9

optionee

Question 10

A provision giving a person the first right to purchase real property; most often found in commercial leases

Answer 10

preemptive right

Question 11

The right of a person to have the first opportunity to either purchase or lease real property, if the owner ever decides to sell or lease; no terms are negotiated.

Answer 11

right of first refusal

Question 12

(1) a buyer’s investigative process of having experts inspect the property, examine title, and
review any leases to determine if the property meets the buyer’s needs and if buyer wishes to proceed with the purchase. During this period, the buyer can terminate the purchase contract for any reason or no reason; (2) a licensee’s affirmative duty to discover and disclose any material facts about the property in question.

Answer 12

due diligence

Question 13

A provision in a contract that requires a certain act to be done or a certain event to occur before the contract becomes binding; a condition of the contract

Answer 13

contingency

Question 14

If the property owner decides to the sell the property, they must offer to sell to contractual party for a designated price; if the contractual party does not opt to purchase, the owner may sell to a third party within a specified time. If sale to third party does not occur, the right is still valid and process restarts

Answer 14

right of first opportunity to purchase