Real Estate Transactions

Flashcards on Real Estate Transactions

Logical Documentation Progression

Helps track negotiations, clarifies outcomes, and is essential for resolving disputes.

Contract-Related Documents

Appendices, schedules, addenda, amendments, notices, and brokerage termination agreements.

Licensee Responsibility

Ensure both the contract and additional documents reference each other.

Best Practice for Linking Documents

Include phrases like 'see attached amendment' or 'see attached addendum'.

Referencing the Original Contract

With a statement like 'This Addendum forms part of Real Estate Purchase Contract #123456'.

Sending Confidential Information Electronically

Using appropriate safeguards such as encryption technology.

Referencing Documents to Prevent Mortgage Fraud

To prevent a buyer from omitting documents that could alter a lender's decision.

Appendices

Supplementary forms included with a contract, often attached to a listing agreement by the seller.

Use of Appendices

Contracts often lack space for all transaction details, so appendices capture extra information.

Schedules

Supplementary forms often completed by the buyer to outline additional transaction details.

Addendum

A document attached to and forming part of the original contract to modify, supplement, or add terms.

Use of Addenda

To modify or add to an agreement without rewriting the entire contract.

Example of Addendum Use

When parties agree to split repair costs after a property inspection.

Critical Component of a Legally Binding Addendum

It must be executed with and form part of the original contract.

When an Amendment is Required

To change, add, or remove any aspect of an already executed contract.

What is Needed for a Valid Amendment

Consent of all parties to the contract.

Can One Party Amend a Contract Alone?

No, amendments require agreement from all parties.

Example of When an Amendment is Needed

When both parties agree to change the possession date of a property.

Occurence for a Condition Precedent to Be Removed

Written notice that the condition has been waived or satisfied within the agreed timeframe.

What Happens if Notice for a Condition Precedent is Not Given in Time?

The contract is terminated.

Notice of Waiver

A document where a party removes a condition, even if it has not yet been fulfilled.

Example of When a Notice of Waiver Might Be Used

A buyer waiving their right to a home inspection even though they had that right in the contract.

Under What Circumstances Can a Service Agreement Terminate Early?

If circumstances arise during service provision or through a termination clause.

What Is Typically Required for Early Termination of a Service Agreement?

Written notice, dated and signed by the parties.

Are Termination Agreements Available for All Clients?

Yes, for sellers, buyers, and tenants.

Can a Client Unilaterally Terminate an Agency Relationship?

Yes, especially if they lose confidence in the relationship.

Does a Client Terminating the Agreement Always Avoid Further Obligations?

No, they may still owe damages or compensation for work performed or opportunity lost.

What Fiduciary Duty Does an Agent Owe to the Client?

To always act in the client's best interest.