Unit 11- Real Estate Contract

Question 1

A contract

Answer 1

An offer and acceptance, bound by consideration(money), between legally competent parties and for legal purposes

Question 2

Unilateral contract

Answer 2

One person bound to act

Optionor is bound to act

Person giving bound to act

Question 3

Executed

Answer 3

Commission paid

Done contract

Question 4

Executory

Answer 4

Waiting for the contact to be executed

Question 5

Offer and acceptances

Answer 5

Agreement on purpose and term

Must be in writing due to statute of frauds

No deviation from original contract

Question 6

Statute of frauds

Answer 6

Must be in writing

Question 7

Statute of limitations

Answer 7

Time restrictions

Question 8

Reality of consent

Answer 8

Awareness of knowing what your doing

Voidable

Question 9

Voidable

Answer 9

Could go either way

Seems valid, but upon further investigation, someting wrong

16year old signing , not of legal age

Mental illness/age/fraud

Question 10

Legally competent parties

Answer 10

Must be of legal age

Of right mind

Question 11

Void

Answer 11

Contract not valid

Lacks 4 points to make it valid

Question 12

Valid contract

Answer 12

Offer and acceptance
Bound by consideration.
Competent parties
Legal

Question 13

Unenforceable

Answer 13

Not in writing

Question 14

Discharge of contracts

Answer 14

Performence of contract- time is of the Essence - not making an acceptance in a matter of time

Assignment- new person to take over. Transfer rights to a third party

Breach of contract

Novation- sub new contract for old contract

Question 15

Assignment

Answer 15

• new person to take over.

Transfer rights to a third party

Sublease

Substitute people

All contract are assignable by law unless noted

Question 16

Novation

Answer 16

• sub new contract for old contract

Question 17

Cancellation

Answer 17

Canceled contract

Terminates contract with out return to original position

Question 18

Rescission

Answer 18

Returns to original position

Ernest money returned

Question 19

Land contract syn

Answer 19

Contract for deed / installment contract/ owner financing/ rent to own

Question 20

Contract forms

Answer 20

RE agents don’t practice law

Preprinted forms

Question 21

Sales contract

Answer 21

Contains the offer between buyer and seller

Sakes price and terms
Legal description
Title evidence 
Title condition 
Statement of terms agreed on
Contingencies

Question 22

Destruction of premises

Answer 22

WV law says seller responsible for any loss before closing

Executory stage

Question 23

Liquidated damages

Answer 23

Ernest money serves liquidated damages. Decide not to buy house for no good reason. Must be stated

Question 24

Proper sale contingency

Answer 24

Protect buyer from owning two house

I’ll buy this house when mine sells

Question 25

Escape clause

Answer 25

Continue to market property until contingency are done Can continue to take offers

Question 26

Specific performance

Answer 26

Buyer or seller can sue to enforce term if one party backs out

Question 27

Consumer financial protection

Answer 27

Lender must ``` Show billing info writing Give 2 month warning for ARM rate change Promptly credit borrowed payment Respond quickly about payoffs Not charge for insurance that we don’t need Resolve complaints in 30-45 days Customer service Trouble making payment help Allow review of loan workout request ```

Question 28

Homeowner insurance

Answer 28

Basic and broad forms Broad covers more and is more expensive ``` Basic - fire and lighting Glass breakage Windstorm and hail Explosion Riot Airplane Vehicle Smoke Vandalism Theft ``` ``` Broad Snow damage Tree Collapse of building Hot water system Overflow of water Freezing of plumbing Injury to electronics Egg ```

Question 29

Co insurance clause

Answer 29

Maintain 80% of replacement cost of dwelling Cover 80% of home

Question 30

Flood insurance

Answer 30

Flood prone area need insurance. Federal FEMA Effective 30 days after purchase ``` Not covered: Pools Animals Underground systems Any unnatural floods ```

Question 31

Rent or buy

Answer 31

Housing affordability and current mortgage insurance rates

Question 32

PITI

Answer 32

Principal Insurance Taxes Interest

Question 33

Debt to income

Answer 33

28% with no expenses | 36% with expenses

Question 34

Hypothecation

Answer 34

Mortgage secured by real property Deed of trust

Question 35

CLUE

Answer 35

Comprehensive loss underwriting exchange Insurance company data base in claims