Farm and Ranch Contract Flashcards

Farm and Ranch Contract Flashcards Paragraph 19Representations- all representations survive closing- seller may continue to show the property, receive, negotiate, and accept back up offers Paragraph 5Earnest Money- insert the amount of earnest money and the name and address of the title company- if additional earnest money is required, enter the amount and the number of days Broker Informationbroker names and contact information Paragraph 23Termination Option- enter the option fee amount and the number of days- check the box to indicate that the fee will or will not be credited to the sales price at closing Paragraph 12Settlement and Other Expenses- typical seller and buyer expenese at closing- expenses the seller is willing to pay on the buyer's behalf- if any of these listed expenses exceeds what the party agreed to pay, the contract will terminate, UNLESS the other party agrees to pay the excess Option Fee Receipteither seller or the listing agent may sign acknowledging receipt of the option fee Paragraph 13Prorations and Rollback Taxes- all counties in the State of Texas allow qualified landowners "ag status" of farm or ranch property or for property used for the production of agricultural products, including timber. This conditional status is most commonly referred to as an "exemption." This conditional status does not include homes or outbuildings on the land, but just the value of the land itself- if an owner has taken advantage of the condition or exemption and changes the use of the property, the taxing authority in that county will roll the taxes back for a period of five years Paragraph 6Title Policy and SurveyC.(4) -> No survey is requiredE ->

Exception Documents: Exception documents can vary from

property to property, but some of the common exceptions are oil or gas pipelines, granted easements, granted surface waivers, utility easements, and cemeteries. In many cases, the listing agent may not have a complete list of exceptions, so it might be wise to allow the title company to identify all the exceptions, which will all appear on the

"search of title document"F -> Surface Leases: You must

discuss these leases with your Buyer since he or she may not be willing to continue them; if Buyer wants to cancel

any lease, then a statement to that effect should be made on the lines below or in Paragraph 11 of this contractG.(7)

-> Texas Agricultural Development District: The property is

or is not located in a development district Paragraph 3Sales Price- down payment + total financing = sales priceD -> The Sales Price may or may not be adjusted based upon a survey required in Paragraph 6.C. The parties can agree to adjust the cash portion, the financing portion, or allocate between cash and financing proportionately. Note that the contract may be terminated by either party if the sales price varies by more than 10% from that stipulated in 3.C. If adjusting, the parties should insert a per-acre price adjustment

Paragraph 15Default- effects of default by either Buyer or Seller are specified Paragraph 20Federal Tax Requirements- escrow agent will withhold from the sales proceeds an amount sufficient to comply with applicable tax law and deliver the same to the IRS if any party to the transaction is considered to be a "foregin person" Paragraph 8Broker's Fees- fees due the broker are found in separate agreements, usually the listing agreement between the broker and Seller, and Buyer's representation agreement between the broker and Buyer Contract and Earnest Money Receiptescrow agent will fill out this part of the form when title is "opened" by the delivery of the contract to the title company Paragraph 7Property Condition- all things relating to the property, including the seller's disclosure notice7.J. -> Government

Programs: The most common government programs are

grants from the U.S. Department of Agriculture (USDA) that are used for soil and water conservation projects on the property Paragraph 22Agreement of the Parties- check the applicable addenda that should be a part of this agreement Paragraph 18Escrow Paragraph 17Attorney's Fees- attorney's fees and all costs of such proceedings are recovered by a party who prevails in any legal proceeding related to this contract Paragraph 24Consult an Attorney- indicate attorney contact information if nessecary Paragraph 14Casualty Loss- casualty loss does not release buyer or seller from the contract- seller has until closing to bring the property back to its prior condition. Buyer can accept the property in its damaged condition with Seller assigning insurance proceeds to Buyer- buyer can terminate the contract and receive an earnest money refund if the property cannot be repaired in the time allotted- seller bears the risk of casualty loss up to the moment of closing Paragraph 21Notices- notices are to be in writing- agents must ensure that the escrow agent has proper contact information for buyer and seller through the date of closing Paragraph 4License Holder Disclosure- a license holder with a relationship with a party to the transaction must disclose this information to the other party before entering into a contract Paragraph 10Possession- seller shall deliver the property in its present condition, ordinary wear and tear excepted- possession should be given to buyer upon closing and funding

Paragraph 1Parties- legal names of buyer and seller as they will appear on all documents and closing instruments- blanks for both buyer and seller should be filled in without any reference to marital status Paragraph 9Closing- stipulates closing date and all things both parties must do in order for the transaction to close successfully Paragraph 11Special Provisionsonly for factual business details or statements not addressed in the contract form and for which there is no TREC-promulgated addendum, lease, or other mandatory forms Paragraph 16Mediation- buyer and seller agree to mediation in the event that the parties have a dispute that cannot be settled through informal discussion- cost of mediation is divided equally between buyer and seller Paragraph 2PropertyA -> legal description and address of the property to be conveyed; if the property is described by metes and bounds, attach the description to the contractB -> improvements, all man-made additions to the land, and other permanently installed and built-in items; included in the improvements are the usual residential improvements and specific farm and ranch improvementsC -> accessories, which are commonly conveyed to buyer in the sale; accessories include the typical residential items and farm and ranch accessories to be conveyed are indicated

by checking the appropriate boxesD -> Crops: if buyer

gives seller this right, make sure buyer is covered by a separate agreement for this operation; buyer and seller must agree as to how seller will leave the land, including who will shred the stalks, plow the ground, and other

issuesE -> Exclusions: would include portable pumps,

augers, grain stored in a storage device, baled hay, feed

for stock, fertilizerF -> Reservations: if minerals are to be

reserved, they must be reserved using the TREC Addendum for Reservation of Oil, Gas, and Other Minerals