Chapter 8- Real Estate sales contract
What is equitable title
Equitable title is the legally assured future interest in legal title. Equitable title can be sold, given away, or mortgaged and it passes to the purchaser's heirs and devisees upon the purchaser's death.
What are the mandatory Federal Clauses needed in a sales contract?
1. The amendatory language clause must be included whenever a sales contract is signed by the purchaser prior to the receipt of an FHA appraised value or VA certificate of reasonable value on the property. 2. Federal trade commission requires builders and sellers of new homes include the insulation disclosure in all purchase contracts.
What is a binder?
A binder is a short purchase contract used to secure a real estate transaction until a more formal contract can be signed. Usually found in the NE of the United States.
What is an option contract?
An option contract is an unilateral contract. A person has the right, but not an obligation to perform under an agreed upon terms, price, and time period. An oral option agreement would be not only unenforceable, but void.
What is the difference between or vendor or vendee
In installment contract the seller is called the vendor and the buyer is the vendee.
What is the right of first refusal?
Its the right to match or better an offer before the property is sold to someone else. If someone presents the owner with a valid offer, the owner must show it to the tenant before accepting it. If the tenant decides not to match it, the owner is free to accept it. "To be determined"
What is earnest money?
Money that accompanies an offer to purchase as evidence of good faith.
What is due diligence or sold as is?
Most due diligence periods are from 7-21 days regarding sales contract.
Does the seller make a contribution at a sales closing?
Sometimes the seller will make a contribution to offset the costs. The theory is that most of the costs are lender created and the buyer is the party that requires the lender.
What is a lease with option to buy?
This option allows the tenant to buy the property at a preset price and terms for a given period of time. These are popular when a person wants to see if they want to purchase the property or not.
what is the term "Time is of the essence?" in a sales contract?
Time is of the essence refers to the time limits or constraints on the contract. If one party doesn't comply in the given amount of time the contract will be in breach or voidable.
What are the laws requiring closing attorney in GA?
Under GA Predatory lending act, the buyer has the right to choose the closing attorney and this should meet this requirement.
What is a purchase contract?
A purchase contract is also known as a deposit receipt, offer and acceptance, purchase offer, or purchase and sales agreement.
What is a rider?
A rider is any addition(attachment or addendum) annexed to a document and made a part of the document by reference.
What is an obligation?
A sales contract has an obligation at a definite price for definite terms for a definite period.
When does the entitlement of earnest money occur?
According to Georgia law the following can occur: 1. withdrawal of an offer. 2.rejection of an offer. 3. closing of the contract. 4. separate written agreement of all parties with an interest. 5. court order 6. filling of an interpleader. 7. reasonable interpretation of the holder of money.
What are the essentials of a notice in a sales contract?
All contracts must be in writing!! 5 delivery methods: 1. in person 2. overnight/delivery 3. fax 4. registered or certified mail 5. email
What is default?
Default is the failure to perform a legal duty, such as failure to carry out the terms of the contract.
What are installment contracts?
Installment contract is a method of selling and financing property whereby the seller retains title, but the buyer takes possession while making payments. The seller has options he can take: 1. Deliver a deed to the buyer at closing, and at the same moment take back from the buyer the promissory note and a mortgaged secured by the property. 2. Enter into an installment contract wherein the buyer makes the required payments to the seller before the seller delivers a deed to the buyer.
what is the risk and damage clause in a sales contract?
It states the condition of the property will be the same when signed at contract time. Either party- buyer or seller can cancel agreement within 14 days of notification of damage.
What is a letter of intent?
Its neither a contract nor an agreement to enter into a contract. Its an outline of the proposal of the contract.
What are optionor and optionee?
Optionor is the party giving the option in a lease contract. The optionee is the party receiving the lease contract. An option is the RIGHT to a contract with a definite price and terms.
What is meant by the agency and broker compensation?
Purchase and sale agreement is between the buyer and the seller and the compensation provisions are between the party responsible to pay and the brokers. This is usually negotiated in the brokerage engagement agreement.
what is the purpose of a sales contract?
The main reason is that the buyer needs time to ascertain that the seller is in fact legally capable of conveying title. The exchange of promise forms the legal consideration of the contract.
what is the E-sign act?
When signing a contract the parties must agree to an electronic transaction, but the use of email is an implied consent. Contract still has to meet clarity and certainty.