Vocabulary Study Cards Ch. 10

Question 1

Contract for deed / installment land contract / land contract / conditional land contract

Answer 1

A contract of sale and financing instrument where in the seller agrees to convey title when the buyer completes the purchase price installment payments.

Question 2

Due diligence fee

Answer 2

A nonrefundable amount of money paid by the buyer, to the seller, to compensate the seller for the buyers right of due diligence. This fee is not required by law.

Question 3

Effective date

Answer 3

The date the contracts been both signed and proper notice has been delivered to the offeror that the offered has accepted in writing.

Question 4

Equitable title

Answer 4

Opposite of legal title. Equitable title is title that will be conveyed once certain contract obligations are performed.

Question 5

Installment land contract

Answer 5

(Same as contact for deed)

Question 6

Legal title

Answer 6

Belongs to the party who actually holds the deed. Opposite of equitable title.

Question 7

Liquidated damages

Answer 7

A predetermined amount of money to be paid and received as compensation for breach of contract.

Question 8

Offeree

Answer 8

One receiving an offer.

Question 9

Oferror

Answer 9

One making an offer.

Question 10

Option

Answer 10

A contract giving one exclusive right to buy a specified property from the owner at a specified price for specified period of time.

Specific:

• property
• price
• time

Question 11

Optionee

Answer 11

One who receives an option.

Question 12

Optionor

Answer 12

One who gives an option.

Question 13

Right of first opportunity to purchase

Answer 13

The owner agrees to give the lessee the first chance to purchase a property at a price determined in the future if and when the owner decides to sell.

Question 14

Right of first refusal

Answer 14

An agreement that should the owner decide to sell or lease, they will offer it to the named party first.