Unit 19 Flashcards
Material Fact
Information that is significant to a person and that persons ability to make an informed decision
Latent Fact
Hidden structural defect that would not be discovered by ordinary inspection.
Stigmatized properties in PA- Miliken V. Jacono
PA Supreme Court affirmed lower court decision that psychological stigmas on a property are not material defects that reduce the value of a property this do not require seller disclosure.
Estimated Statements of Closing Costs
Licensees are required to provide the buyer and seller with written estimated statements of closing costs before the parties sign an agreement for sale.
Based on Real Estate Commission Rules and Regulations it must include brokers commission, mortgage payments, and financing costs, taxes and assessments, and settlement expenses.
Uniform Condominium Act and Uniform Planned Community Act
Requires seller to furnish copies of the developments declaration, bylaws, and rules and regulations of the association (Resales certificate if applicable) for the buyers review. Buyer is entitled to 5 day review period. If it extends past the fifth day the buyer has a right to void the purchase.
Fraud v Misrepresentation
Fraud is intentional. Misrepresentation is unintentional.
Puffing
Exaggeration of a property’s benefits based on opinion. Legal yet not advised.
Offer to Purchase
When the document is prepared and signed by the buyer it becomes the buyers offer to purchase the property.
Purchase Agreement
When offer to purchase is accepted and signed by the seller if becomes the agreement of sale. It creates a legally enforceable contractual relationship between the buyer and seller.
Legally binding contract requirements
- Offer and acceptance
- Consideration
- Legally competent parties
- Legality of object
- Reality of consent
Earnest money/ hand money
Purchaser can provide a deposit when making an offer to purchase real estate. The deposit is usually a check. It is evidence of the buyers intention to carry out the terms of the contraction good faith. The check is given to the broker who holds it for the parties in a special account as required by the licensing law and the real estate commissions regulations.
Money amount is meant to
- discourage the buyer from defaulting
- compensate the seller for taking the property off the market
- cover any expenses the seller might incur if the buyer defaults
All deposits must be kept in one account
Salesperson must immediately turn the money over to the broker. The broker must deposit the money by the end of the business day following their receipt by the broker.
If the offer is not accepted the money must be returned to the buyer. If it is accepted than the seller gets it when the transaction is complete.
Equitable title
The buyer does not receive title to the land when they sign a contract to purchase real estate. Title transfers only upon delivery and acceptance of a deed. The buyer acquires an interest in the land. This interest is know equitable title- Insurable interest in the property.
Contingencies
Additional conditions that must be satisfied before a sales contract. Create a voidable contract; if the contingencies are rejected or not satisfied the contract is void. It includes
- The actions necessary to satisfy
- The time frame within which the actions must be performed
- Who is responsible for paying the costs involved.
ex. mortgage contingency
inspection contingency
property sale contingency
insurance contingency
Amendment
change or modification to the existing content of the contract. Amendments must be initialed or signed by all parties.
Addendum
any provision added to an existing contract without altering the content of the original. Must be signed by all parties. EX. agreement to split the cost of repairing something discovered in the home inspection.
