Reciprocal Agreement Purchase Contract 3 example essay topic

Listing Agreement (now called a service provisions agreement) 1. A type of employment agreement between a principal and a agent 2. It authorizes the broker to try to find (procuring cause) a ready, willing and able buyer on terms acceptable to the seller. Parties 1. Seller is the principal 2. The broker is the agent 3.

Salespeople are the sub-agents of the seller 4. Cooperating broker is the agent of the listing broker and the sub-agent of the seller 5. Salespeople in the cooperating brokers office are agents of their broker Requirements 1. Names of all parties 2.

Accurate description; does not have to be the legal description. 3. Terms and conditions (i.e. FHA or VA sales) 4. Commission 5. Asking price 6. Items included or excluded (i.e. Stove re frig) 7.

Signature Responsibilities to the principal - Confidentiality L - Loyalty O - Obedience T - Trust D - Do care / do diligence A - Accounting / accountability D -Disclosure Responsibilities to principal 1. Licensees must Represent the general public fairly 2. Without deceit or fraud 3. Duty is over and above a fiduciary duty to the principal 4. Broker should never accept a fiduciary duty that conflicts with his / her duty to the general public 5. Reason for the rule is to be certain the public is protected A. Patent defects 0.

A defect plainly visible or as would be disclosed by the exercise of ordinary care 0. You do not have a duty to disclose a visible defects. Latent Defects 0. A licensees must reveal all known hidden defects 0. Is hidden or concealed one that could not be discovered by reasonable inspection Puffing 2. An opinion not made as a representation of fact but in tended to enhance the value of property Selling Disclosure Statement 2.

Took effect Jan. 19942. Requires seller of one to four family residential properties to disclose defects in the structure in writing 2. Filled out by the seller at the time of taking a listing 2. Licensee should not participate or help to fill this form out 2.

Licensee should encourage the seller to be truthful 2. licensee is required to provide a copy to prospect before presenting the offer 2. if the buyer does not get a copy they have the right to resend the deal until the deed is conveyed Types of Listing Agreements Exclusive right to sell listing Property listed with only one broker however, seller promises to pay commissions no mater who finds the buyer during the listing period. Exclusive Agency Property listed with only on broker however, seller reserves the right to find own buyer and not pay a commission Open listing (Pocket Listing) Property may be listed with more the one broker however, the owner reserves the right to find their own buyer and not pay a commission. Net Listing (Illegal in Michigan) Seller wants to net a certain amount on the sell and the brokers commission is anything the sell leaves over. Additional Requirements of Listing 1. Beginning or start date and expiration date 1. non-discrimination clause 1. duties and responsibilities Termination of Contract - Bankruptcy A - Abandonment of contract - Death of broker or principal - Destruction of property - Mutual agreement - Incompetence C - Completion of brokers duties - Expiration of contract Contract Law 7. Valid Contract.

Totally enforceable in court 7. Void Contract. Totally unenforceable in court Void able Contract 0. Appears to be valid on surface but may be resided by one party 0. The other party has no legal recourse Types of Void able Contracts 3. M - Miner someone under 18 3.

C - Contingencies that need to be meet or the party placing the contingencies can get out of contract 3. D - Duress 3. I - Incompetence 3. F - Fraud or misrepresentation Six Essentials to Make Valid Contract - Consideration, promise 2.

Valuable anything or momentary value 2. valid service as apposed to money 2. Good consisting of love and affection C - Competent parties (legal age and sound mind) L - Law objective O - Offer, acceptance or delivery M - Mutual consent, meeting of the minds - Proper legal form In offer or counter offer may be withdrawn before delivery and accepted of offer Provisions for default Uniform vendor / purchaser risk act Buyer assumes the risk of loss the min they have a fully executed and delivered purchases agreement Go over pg 9 and half of pg 10 Breach by the buyer permits the seller. Sue for specific performance. Sue for damages.

Keep earnest money deposit. Mutual resend Brokers Commission Broker usually not entitled to commission if it were based on finding a ready, willing and able buyer. LIEN monetary claim on title when property is provided as collateral. Suit for specific Performance- cont Chart of contract and / or instruments used in real estate Instrument GivorReceiveExecutiesDeed - used to covey interest in Real Estate. G = grant or. R = grantee.

Executed by grantor Option - conveys the right to do something at a future date. G = option or. R = option ee. Executed by optionorAssignment conveys all right and interest in contract cannot assign personal liability. G = assignor.

R = assignee. Executed by Devise a gift of Real Estate by will. G = devisor. R = devisee. Executed by devisor Mortgage - a pledge of property as collateral for a note. G = mortgagor.

R = mortgagee. Executed by mortgagor Lease - conveys right of possession. G = lessor. R = lessee. Executed by lessor Installment Sale (also called land contract) buyer promises to buy and seller promises on installments. G = vendor.

R = vendee. Executed by both parties Purchase Agreement where the buyer promises to buy and seller promises to sell. G = vendor. R = vendee.

Executed by both parties Option - convey right to do something at a future date Requirement- C, C, L, O, P- proper legal form Must be written Must expiration date Accurate description of property Names of all partiesOptionor's signature Creates an encumbrance on title You must have a defined price and terms Must have consideration to cover potential damages to the option or if option is not exercised Additional elements of an option Optionee does not have to exercise option however, they loose their consideration If option or breaches then option ee can sue for specific performance All right and interest are assignable however cannot assign liability Lease - leas or coneys right occupy and use a specific property for a specific period of time Parties Lessor (land lord) - is owner and giver of right to occupy and use Generally have fee simple ownership Classified as free hold interest Lessor has reversionary interest Duties of Lessor - Must provide habitable conditions or fit to live in. (constructive eviction -landlord failed to provide habitable condition) Must provide quite enjoyment (no rights to enter) Lease - receives right to occupy and use Have leases hold interest also called the tenant Essential elements of a lease, C, L, O, Proper legal form (may be verbal and binding in Michigan for one year or less) Names of all parties Accurate description And the signature of the leassorTerm will be specifically stated to be binding Purpose they are renting for Clauses of a lease First right of refusal Similar to an option tenant has first right to meet a purchaser offer if property goes up for sell, does not require consideration like a option does Escalation clause Earned commission Is when you have found a buyer who is ready willing and able to buy on sellers terms Entitled commission Is one in witch you could legally receive in a court of law Unilateral Contract (very rare in commerce) 2. A contract under witch one party makes a promise to the other party although receiving no reciprocal promise Bilateral Contract 5. A contract under witch the parties expressly enter into mutual promises such as a sales contract 5. Sometimes called a reciprocal agreement Purchase Contract 3.

Definition 2. Buyer promise to buy and seller promises to sell on stipulated price and terms 2. This is a bilateral contract 3. Parties. Offeror - The person making the offer.

Offered - The person receiving the offer. Counteroffer 1. Created when any changes are made 1. A counter offer reverses the legal position of the parties 1.

Counter offer completely voids out original offer. Vendor / Vendee 2. The seller / buyer in an installment sell until the sell is complete (land contract). Equitable title / equitable interest 0.

Ownership does not have legal title such as a vendee in a land contract. 3. Legal Requirements Michigan transfer Tax Charged on the sales price from the deed from one buyer the another Required to be paid what deed is recorded at the county clerks' office Sell seller generally pays transfer tax stamps Recording Act Recording is to give notice to the world called constructive notice Protect ones interest from third parties claims Must be notarized Recorded at the county clerks office where property is located April 1st a new law went into effect Usury Laws Prohibits excessive int. rates when using other people's money Legal rate of interest in Michigan is 5% (court rate) when contract is not in writing Land contract is 11% interest rate contract between in div where real estate is subject Can go higher if it's a principal residence 3 out of last 5 years, and the property or the title is free and clear Criminal usury rate is over 25%Penalty for this violation is loss of all interest over life of note, principal would still be due. Pg. 34 M - Mortgages A - Analyses of market - Renting or Leasing - Buying - Listing - Exchanging S - Selling People who do not need real estate license B-builder A-administrator court appointed S-Selling under a deed of trust unless repeated or successive E-Execivetor C-Court appointment H-Holding power of attorney A-Attorney at law-Receiver court appointed T-Trustee and Bankruptcy A-Appraiser R-.