Chapter 12

Contract becomes valid when:

both buyer and seller sign

Prospective buyer makes a written purchase offer that the seller accepts, then:

buyer receives equitable title to the property

Statue of Frauds states all contracts:

must be in writing to be enforceable

To assign a contract for the sale of real estate means to:

transfer ones rights under the contract

Broker gets offer to purchase, seller out of town, broker must:

wait to obtain the signature of the seller to effect the contract

The amount of an earnest deposit is determined by:

Agreement between the parties

Broker deposits earnest money int trust account. When can seller receive it?

At time of settlement

What is the status of an option contract that has been exercised?

Bilateral

Broker receives earnest money on Tuesday. Seller accepts offer on Thursday. When does Broker need to deposit earnest money?

By Friday in special non interest bearing trust account.

The term rescind means:

Cancel

Real Estate Licensee may draft a contract:

NEVER, licensee can only fill in blanks.

Void contract:

Not legally enforceable.

Broker took listing and later found out client is legally incompetent. Listing is now:

Of no value to broker, VOID

Every real estate contract must have:

Offer & Acceptance

Owner takes property off market for definite period of time in exchange for some consideration, but grants right to purchase property within that period for a state price this is called

Option

How must real estate contracts be headed under IL law?

REAL ESTATE SALES CONTRACT Bigger font than rest of contract

Both parties sign sales contract. Three days before closing tornado destroys property. Under IL law:

Seller cannot enforce contract and must return all earnest money to the buyer.

After buyer & seller sign sales contract, seller changes mind and defaults. Buyer sues seller to force contract. This is know as a suit for:

Specific Performance

Law that requires real estate contracts to be in writing to be enforceable:

Statute of Frauds

Breach of contract is a refusal or failure to comply with terms of contract, buyer may:

Sue seller for specific performance Rescind contract and recover earnest money Sue seller for damages

Legal proceeding or legal action brought by either buyer or seller under a purchase contract to enforce the terms of the contract is known as

Suit for specific performance

IL deed or contract executed on Sunday or legal holiday is:

VALID and enforceable

Contract agreed to under duress:

VOIDABLE

Seller said empty lot soil was firm enough to support new construction, seller knew building would probably sink. Contract is:

Voidable by buyer because of fraud.

Buyer defaulted some time ago on a written contract to purchase sellers real estate. Can seller sue for damages?

Yes, if seller is not prohibited from doing so by statute of limitations.

What is best evidence of buyers intention to carry out terms of contract?

earnest money deposit

In option to purchase real estate, optionee:

has no obligation to purchase the property

An option:

keeps an offer open for a specified time period.

Essential elements of a contract do not need:

notarized signatures

Buyer has right to revoke offer at any time and recover earnest money until:

offer is accepted

Bilateral contract:

promise for a promise

Offeree has right to:

reject offer

Upon receipt of offer to purchase property under certain conditions, seller makes counter offer, the buyer is:

relieved of original offer

Revocation of offer before acceptance, death of offeror before acceptance, counteroffer by offeree:

terminate offer

Destruction of the premises would:

terminate sales contract