Real Estate Contracts and Agency Flashcards

Real Estate Contracts and Agency Flashcards Amendmentchange to existing terms and conditions Installment sales contract (installment land contract)seller retains deed releasing it when buyer pays off property. the buyer has equitable title.Statue of frauds requires that certain contracts: be in writingidentify partiesthe buyer signs the contractidentify terms Option contractoffer to purchase a specific piece of real estate without the obligation to buy it Assignment of a contracta substitute for one of the original parties Universal agentauthority to act for the principal Express agencyagency relationship that the parties understand and agree to Ratificationacceptance after the fact Agentsomeone who has been given the authority to act on someone else's behalf Buyers agent is obligated to preform the following tasks for

the buyer clients:

Show them properties that meet their criteriaensure that they receive required property condition disclosuresensure that they understand the importance of the due diligencereview transaction documents with themnegotiate contract terms that are fair and agreeable to themcommunicate all counter-offers to them Breach of contractoccurs when a party fails to meet the contracts obligations Enforceable Contractwill stand up in court Fiduciarysomeone who's is in a position of trust and owes loyalty to another Estoppelprevents one party from suing another Non-agentdont represent customers; they just assist them Implied Contracta contract that comes about from the actions or behaviors of the parties instead of their words or written agreement Void contractlack ones or more of the requirements for a valid contract Compensatory damagesto compensate or reimburse the plaintiff for actual losses Executed contractall parties have completed the terms of the contract Contingenciesconditions that must be met before the agreement of sale is complete and enforceable.Transactional brokera non-agent who acts only as a facilitator for a party Implied agencyan agency that occurs when a principal and an agent do not expressly create an agency, but it is inferred from the conduct of the parties Novationa new contract that is substituted for the prior agreement Equitable titlesomeones right to retain full ownership of a property when a certain condition is met

Binding acceptanceoccurs when the signed contract is delivered back to the offeror Consumersomeone who uses or purchases a product or service executory contractcontract not fully performed on both sides Valid Contractincludes all the necessary elements and is signed by all parties Right of first refusala potential buyer enters into an agreement stating that if the owner decides to sell, the holder has the first right to make an offer on and purchase the property Seller's agent is obligated to preform the following tasks for

the seller clients:

seek a property sale for the best price and on the best terms possible for theminform them of their responsibility to make all the required property disclosuresnegotiate contract terms in accordance with their wishesensure that the buyer's earnest money is deposited as requiredcommunicate all offers and counter-offers to them General agentresponsible to handling all dealings in a giving area on behalf of a client Express Contracta stated (or written) agreement between two parties Bilateral Contractboth parties have obligations A valid contract requires these 5 elements offer and acceptance, consideration, legal competence, legal purpose and consent Special agentlimited authority to act on a clients behalf Voidable Contractappears valid but both parties have the right to cancel it Agency coupled with interestagent has some form of security interest in or ownership/possession of the principal's property Addendumaddition to existing terms and conditions Sub-agentlicensee from one firm who preforms tasks for another firm and the seller who that firm represents in a transaction Single agenta licensee who represents either the buyer or the seller in a transaction Acceptanceoccurs when all parties have signed the contract Designated agenta licensee who's appointed by the firm's broker to represent one party Indemnification Clausereleases parties from liability or loss Escalator offerbuyer agrees to beat any competing offer up to a specified amount Customersomeones who's working with a real estate licensee but isn't represented by that licensee Principalthe person the licensee represents in an agency relationship Punitive Damagesdamages exceeding simple compensation and awarded to punish the defendant."Time is of the essence"A phrase in a contract that requires the performance of a certain act within a stated period of time.

Unilateral Contractonly one party makes a promise

Contracts may terminate in these ways:PerformancePartial performanceSubstantial

performanceImpossibility of performanceMutual agreementOperation of lawExpiration Unenforceable Contractmay be valid but is unlikely to stand up in court OLDCARObedienceLoyaltyDisclosureConfidentialityAccountingReas onable Care Dual agentsingle licensee who represents both buyer and seller in a single transaction Situations that may result in a breach of contract:either party's failure to adhere to contract deadlineseither party's refusal to meet contract terms and conditionsseller's failure to perform repairs that were agreed toseller's inability to provide clear titleseller's refusal to give possession of the propertybuyer's failer to obtain financing or to act in good faith to obtain financing