Unit 11 - 12 State - Real Estate Contracts

Question 1

Unit 11
Statue of frauds

Answer 1

must be in writing and signed to enforceable

(lease agreement less than a year would not be covered by the statue of frauds)

Question 2

Unit 11
Unilateral Contract

Answer 2

only one party makes a promise to perform without receiving any promise of performance from the other party

Question 3

Unit 11
Executory contract

Answer 3

involves promise to perform at a later date

Question 4

Unit 11
remedy for breach - special performance

Answer 4

Sue to force them to perform as stated in contract

Question 5

Unit 11
Open listing

Answer 5

can list property with more than one broker, whoever brings buyer gets commission

Question 6

Unit 11
Lead-Base Paint Disclosure

Answer 6

disclose any lead-based paint if built before 1978

Question 7

Unit 11
Florida Statue 720

Answer 7

Laws for HOA and HOA disclosures

Question 8

Unit 11
In addition to HOA Disclosure Summary, what else should the contract for sale and purchase include?

Answer 8

1. buyer should not sign w/o receiving and reading HOA disclosure summary
2. Contract is voidable if buyer does not receive HOA disclosure summary before closing
3. give written notice to cancel within 3 calendar days after receipt of HOA disclosure summary
4. After closing, no longer right to waive contract (if didn’t receive HOA summary disclosure but buyer signs contract, cannot cancel for that reason)

Question 9

Unit 11
Real estate licensees may assist buyers and sellers with completion of 4 types of contracts

Answer 9

1. listing agreement
2. Buyer brokerage agreement
3. Sale and purchase contract
4. Option contract

Question 10

Unit 11
5 elements of Valid and Enforceable Real Estate Contract

Answer 10

COLIC (writing and signed makes it enforceable)

1. competent parties
2. offer and acceptance (mutual assent)
3. legality of object (legal purpose)
4. In writing and signed (not needed to be valid, only enforceable)
5. consideration (obligation give to each party… not always money, NOT the earnest or good-faith deposit)

Question 11

Unit 11
Types of Consideration for Valid Contract

Answer 11

Valuable = promise to give money 
Good = NOT money, family promise, measured by love and affection, gifting property

Question 12

Unit 11
Statute of Limitations

Answer 12

period of time contract may be enforced
written = 5 years
oral (PAROL) = 4 years

Question 13

Unit 11
Ways an Offer is Terminated

Answer 13

WILD CARD

Withdrawal by offeror
Insanity
Lapse of time
Death

Counteroffer
Acceptance - offer becomes contract
Rejection
Destruction of property

Question 14

Unit 11
Remedies for Breach of Contract

Answer 14

Specific performance = court orders party to perform
Liquidated damages = not court ordered, usually earnest money deposit
Rescission = court ordered, contract cancelled and all restored to original positions
Compensatory damages = court order, actual monetary loss to a party

Question 15

Unit 11
novation

Answer 15

discharge original party and substitute new party
ex: assume a mortgage, be sure to have novation

Question 16

Unit 11
All written LISTING contracts must include (5)

Answer 16

1. DEFINITE expiration date (NO auto renewal clause)
2. description of property
3. Listing price and terms
4. fees or commission
5. Signature(s) of all owner(s) of record
   copy given within 24 hours of execution

Question 17

Unit 11
What the broker must do to be paid commission? (3)

Answer 17

1. hold current, active real estate license
2. employed by seller and/or buyer through a listing agreement or buyer broker agreement
3. procuring cause = started chain of events (option for referral)

Question 18

Unit 11
Option Contract

Answer 18

Buyer purchases an option period (unilateral contract) owner (optionor) grants prospective buyer or tenant (optionee) the exclusive right to buy or lease owner’s property for specified price and terms within period of time
owner is the one who takes action… buyer pays for option to buy but does not have to

Question 19

Unit 11
Vendor vs Vendee

Answer 19

vendor = seller 
vendee = buyer

Question 20

Unit 11
When are both spouses signatures needed for real estate sale contract?

Answer 20

co-owned by married couple (estate in entireties) or homesteaded and ownership by one spouse

Question 21

Unit 11
“As Is” provision

Answer 21

Still obligated to disclose but saying “don’t like it, don’t buy it.”

Question 22

Unit 11
Do you have to share if someone died in your home?
AIDS? HIV?

Answer 22

Death = No, unless single agent and they ask (full disclosure)
AIDS and HIV = ABSOLUTELY NOT! Personal medical information

Question 23

Unit 11
If home older than 1978, must give (sale or lease) (3):

Answer 23

*disclose any known lead-based paint
*EPA pamphlet regarding danger of lead-based paint
*allow buyer 10-day period to inspect for presence of lead-based paint