Modern Real Estate Practice in Pennsylvania 12th Edition Chapter 19: Sales Contracts

19Sales Contracts Learning objectives –Explain statutory and regulatory requirements governing written agreements, disclosures –Summarize rules and regulations for earnest money deposits –List how key components, elements, and provisions of an agreement of sale –Describe options and installment contracts applications –Define key terms 2 ©2012 Kaplan, Inc.

19Sales Contracts Purchase agreement is culmination –Marketing efforts –Helping buyers find a property Disclosures –Material facts –Latent defects –Estimated statements of closing costs –Uniform Condominium Act and Uniform Planned Community Act 3 ©2012 Kaplan, Inc.

19Sales Contracts Disclosures –Opinion versus fact –Fraud –Misrepresentation –Stigmatized properties 4 ©2012 Kaplan, Inc.

19Sales Contracts Agreement of sale –Legally enforceable rights –Sales price and terms –Legal description of the land –Statement as to condition of title –Kind of required title evidence –All terms, conditions, contingencies 5 ©2012 Kaplan, Inc.

19Sales Contracts Preparing a contract –Fill in blanks of preprinted forms –Avoid unauthorized practice of law Offer –Earnest money –Binder –Counteroffer Acceptance –Use of electronic signatures –Equitable title –Destruction of premises 6 ©2012 Kaplan, Inc.

19Sales Contracts Parts of agreement of sale –Identify purchaser –Identify property –Identify seller and type of deed –Financial details –Mortgage contingency –Closing details –Title evidence –Proration details –Liquidated damages –Dated signatures of all parties –Personal property –Special assessments –Buyers’ final walkthrough –Other details 7 ©2012 Kaplan, Inc.

19Sales Contracts Contingencies –Mortgage –Inspection –Property sale Amendments and addendums Disclosures –Agency –Real estate recovery fund –Zoning classification –Lead-based paint (pre-1978) 8 ©2012 Kaplan, Inc.

19Sales Contracts Options –Unilateral contract –Optionor, optionee –Enforceable by optionee Installment contracts –Contract for deed, land contract –Vendor, vendee –Defaults 9 ©2012 Kaplan, Inc.