standard 1%, shows buyers intention to buy, may be used to compensate party if other breeches
Contingencies
actions necessary to satisfy, Any costs involved - who is responsible, taxes mortgage, inspections, property date, escape clauses
Amendments
change in existing contract
Addendum
addition or new provision to a contract
Deposit money on property sale
put in trust fund,
AK regulations for deposit
broker is in charge of trust fund, , deposit in 5 days
Forfeitures of deposit
a provision that a deposit toward purchase by prospective buyer shall be divided between the seller and the broker if the prospective buyer breaches the contract
seller’s death before title transfer
usually contains a provision which states that all the terms of the contract are to be binding upon the heirs
Options
A contract - seller promises not to sell to someone else based on consideration - but keeps title
Listing
written contract - sell property-
role of seller in listing contract
seller is principal
roller of person listing the property in a listing contract
agent and therefore owes agency and fiduciary duties to seller
Net listing
clause in contract permits agent to retain as compensation all the money received in excess of the selling price
open (non- exclusive listing)
seller may give to multiple licensees without notification, sale of property cancels contracts
Exclusive agency listing - time limited
commission is payable to broker named whoever sells the property if owner sells then no commission
Exclusive right to sell listing - time limited
a commission is due the broker named in the contract if the property is sold within the time limit by the said broker, by any other broker, or by the owner
Multiple listing services commissions
Don’t set commissions individual brokers do -commissions are shared
When broker is entitled to commission
when the terms of a personal services agreement are fulfilled and the broker is the procuring cause of the sale
specific performance
legal action under a purchase contract to enforce the terms
notarized signatures
NOT essential elements of a contract
parol of evidence rule
The written contract is the complete agreement - other evidence is not allowed - if mistake or fraud the agreement can be revised by the court
Novation
substitute a new obligation for an existing one
rescind
cancel
an option
specifies a time or action
When a prospective buyer makes a written purchase offer that the seller accepts, then the buyer
receives equitable title to the property
A bilateral contract is one in which
the promise of one party is given in exchange for the promise of the other party
statute of frauds
The law that requires real estate contracts to be in writing to be enforceable
Can a broker be sued by buyer for seller non-performance?
No
Assigning a contract means to
transfer ones rights under the contract
When does the buyer receive equitable title?
When a valid purchase contract is signed by the seller and the buyer
If a broker deposits the buyer's earnest money in a trust account, at what time is the seller entitled to receive it?