(1986) sets specific requirements on offering for sale or resale of a condominium created on or AFTER October 1, 1986, although these rights CAN be WAIVED, and typically ARE, when the condo is being used for nonresidential purposes. Show The act offers the following consumer protections (THESE ONLY APPLY TO CONDOMINIUMS!!!): 1. Public Offering Statement- developer must provide a public offering statement to the prospective buyer of a new
condo before the contract is signed. In North Carolina, it also requires developers disclose certain information pertaining to the condominium project, including the purchaser's right to cancel. The public offering statement is NOT required for resale of units. (Pg. 38) Recommended textbook solutions Human Geography13th EditionArthur Getis, Daniel Montello, Mark Bjelland 107 solutions Social Psychology10th EditionElliot Aronson, Robin M. Akert, Samuel R. Sommers, Timothy D. Wilson 525 solutions American Government1st EditionGlen Krutz 412 solutions Human Resource Management15th EditionJohn David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine 249 solutions Recommended textbook solutions
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Terms in this set (64)Uniform Electronic Transactions Act (UETA) North Carolina version of the federal E-sign legislation that validates electronic contracts, documents and signatures. Uniform Electronic Transactions Act essentials Oral: includes phone, voice mail, inperson, Written: includes traditional, special electronic mail, mail box rule, direct to the party's agent Termination of offers occurs If the offer rejects offer or create a counteroffer, if offer is not accepted in a reasonable time or specified, if offer revoked prior to acceptance, death. NC broker contract forms essentials 19 items of enumerated in NCREC rules, brokers compensation and liability disclaimer are prohibited from inclusion in North Carolina sale contracts Real estate sales contract essentials Usually accompanied by earnest money, contains contingencies or conditions to sale, may provide due diligence period, including disclosure forms by State law. 5 day rule In NC all parties must receive a copy of any legal form immediately but no later than 5 days. NORTH CAROLINA REAL ESTATE counteroffer A counteroffer rejects the original offer and constitutes a new offer, not a revision of the original offer Methods of Communicating Offers and Acceptance .communicate in writing, Communication of the acceptance to the offeror may be either oral—by telephone, voice mail, or in person—or by personal delivery of the written acceptance by the offeree or by another person on behalf of the offeree. Communication to either party's agent is deemed communication to that party. . mailbox rule rule of law stating that once written acceptance is placed in control of the mailing service, and out of the control of the offeree, it is considered accepted—not when the acceptance is actually received by the offeror Major Contract Provisions of NCAR/NCBA Standard Form 2-T The major contract provisions of the NCBA/NCAR Standard Form 2-T (OPC) should be well understood by all North Carolina real estate brokers since it is used in the majority of all residential sales transactions in the state. Names. It is essential to identify all the parties to the contract by their full individual names, which includes a full first and last name plus a middle initial if available and any suffix, such as Sr. or Jr. Spouses should be identified by individual legal names, not as Mr. and Mrs. Property A legal description of the property that would distinguish it from all other property is necessary to create an enforceable contract for sale. Street address is helpful but usually not adequate for a binding legal description. Purchase price The amount to be paid for the property may be only slightly more material to the parties than when the amount is due and how it will be paid Earnest money While earnest money is not an essential element of a valid contract, it is unusual for a seller to accept an offer to purchase that does not require an earnest money deposit as an indication of the buyer's good faith. Escrow agent The escrow agent identified by name to hold the earnest money in trust is usually a real estate firm, a title company, or an attorney. It is tradition that the listing firm act as escrow agent, but other arrangements are not unusual Effective date. The effective date, the date that contract was formed, is defined as when the last offeree to sign the offer or initial the last change communicates this action to the last offeror. Due diligence, due diligence fee, and due diligence period. In exchange for a negotiated due diligence fee paid directly to the seller, the buyer has the unlimited right to fully investigate the condition and allowed uses of the property to determine if the buyer wishes to consummate the purchase contract on the negotiated terms Settlement, settlement date, and closing Although closing is still identified as the recording of the deed, settlement is the process of the settlement agent gathering all the documents and funds necessary to complete the sales transaction. Special assessments. Special assessments are charges that may become a lien against the property by a governmental authority for something other than taxes or by an owners' association for something other than dues Fixtures. Items identified as fixtures in an ever-growing list automatically convey with the property if present on the property and owned by the seller unless they are exempted in this paragraph Personal property. No personal property, even if advertised with the property, should ever be presumed to convey as part of the sales contract unless clearly identified in this paragraph Buyer's due diligence process. An extensive, but not necessarily exhaustive, list of activities that should be performed during the due diligence period is outlined to guide the buyer in their investigation of the property Buyer representations In this section, the buyer discloses his transactional plans and needs to the seller. The seller should be able to rely on these representations when making decisions about the offer Buyer obligations. The expenses and fees for which the buyer is obligated to pay are enumerated here: owners' association fees/charges, proposed special assessments, and certain closing costs Seller representations. Seller disclosures, other than the Residential Property and Owners' Association Disclosure Statement, that are required by law or are needed to satisfy buyer financing guidelines Seller obligations. This section consolidates in one place all the duties of the seller. The seller is to provide the buyer with title information, access to the property with working utilities, premises free of garbage, lien waivers, a general warranty deed, a completed Owners' Association Disclosure and Addendum... Prorations and adjustments .Proration of listed items are established unless there is written agreement for different treatment. Condition of the property at closing/risk of loss These two paragraphs work together to ensure that the buyer receives the property in the same or better condition as when the contract was created. Delay in settlement/closing. The use of time is of the essence in regard to the settlement date is discouraged because it might have an unanticipated adverse effect on the parties. Possession Possession of the property is to be delivered at closing (after recordation of the deed) due to reasons that include insurability issues Installment land contract (contract for deed or land contract) is a sales contract and a financing document for owner-financed purchases. Installment land contract essentials The seller's advantages include a tax benefit, earned interest, and selling feature. The buyer can overcome poor credit, and income-producing property can help pay for itself. Option to purchase is when the optionee pays an option fee to purchase time to make a decision to purchase on terms in option or renegotiate terms before the option period expires. The seller (optionor) cannot sell property to anyone else during the option period. In North Carolina all parties must receive a copy of any legal instrument they sign immediately, but no later than five days from execution The North Carolina Association of REALTORS Response to Buyer's Offer form rejects the offer and lists desirable contract terms; it does not create a counteroffer; it is created primarily for use with multiple-offer scenarios. assignment essentials a contract Can Not Be Assigned without consent of all parties involved in a standard offer to purchase contract. must a buyer pay due diligence or earnest money no it is not essential in a contract a sales contract essentials Cant reference commission or disclaim liability Financing Contingency- National Buyer may terminate if not able to obtain financing. Denial must be in writing. Seller is not obligated to extends the contingency date FHA/VA financing addendum If the buyer will be using either FHA-insured or VA-guaranteed mortgage loans to purchase the property, this addendum is required. The addendum allows the borrower to terminate the OPC without forfeiture of any monies if the property does not appraise for at least the purchase price specified in the OPC Buyer possession before closing agreement If the buyer will be allowed to take possession of the property prior to closing, this addendum will address many issues that might arise. Among other things, the provisions of this agreement address rent, pets, insurance, and responsibility for payment of expenses, utilities, repairs, and maintenance ( Seller possession after closing agreement If the seller wishes to retain possession of the property after closing, this agreement will serve in a similar manner to the addendum above for buyer possession. Lead-based paint or lead-based paint hazard addendum Under the federal disclosure requirements of the Residential Lead-Based Paint Hazard Reduction Act of 1992, a residential seller must disclose what he/she knows about the presence of lead-based paint in the property and must provide any known reports about lead-based paint hazards in the property Additional provisions addendum Probably one of the most-used addenda, this form addresses five separate contract concerns. The first provision allows the offeror to implement an automatic expiration date and time for the attached Offer to Purchase and Contract. In the second provision, the buyer secures the seller's assistance in testing the property to determine if an adequate septic system can be installed or modified for the buyer's specific needs. If the property is currently subject to leases, the third provision requires all lease-related documentation to be given to the buyer for review during the due diligence period. The fourth provision would request repair or improvement projects that are known prior to contract formation. The fifth provision asks for the identifying information for any manufactured housing that will be included in the transaction. Owners' association disclosure and addendum for properties exempt from residential property disclosure statement The seller is mandated to provide this completed addendum in transactions where the property to be conveyed is subject to an owners' association but is exempt from compliance with the North Carolina Residential Property Disclosure Act. Short sale addendum If the transaction is subject to a short sale approval by the seller's lienholder, this very informative addendum should be used. This form allows both parties to terminate the OPC under certain circumstances Vacation rental addendum This addendum should be used with any property that is subject to the North Carolina Vacation Rental Act. Back up contract addendum Although a property is under contract, there is frequently a chance that the transaction will not close due to any of multiple reasons. The primary buyer could exercise the right to terminate the contract during the due diligence period, the buyer financing might fall through, or the seller and the buyer cannot agree to repair negotiations. Contingent sale addendum If the buyer has indicated that he needs to sell other property to consummate the purchase of the subject property, it is highly recommended that the buyer consider using the contingent sale addendum.The buyer's right to terminate this contract without forfeiture of earnest money will survive the expiration of the due diligence period. The addendum allows the buyer to terminate this contract and receive a refund of earnest money within three days after the settlement date of this contract Submitting Offers to Seller In North Carolina Installment land contract (contract for deed or land contract) is a sales contract and a financing document for owner-financed purchases. In North Carolina, all parties must receive a copy of any legal instrument they sign immediately, but no later than five days from execution. Option to purchase is when the optionee pays an option fee to purchase time to make a decision to purchase on terms in option or renegotiate terms before the option period expires. The seller (optionor) cannot sell property to anyone else during the option period. An option to purchase has two considerations : (1) the option fee when the option is given and (2) the agreed-on sales price when the option is exercised. Requirements of North Carolina Options All options for real property are required to be in writing under the statute of frauds. Under the Conner Act, an option must be recorded to be enforceable against the claims of third parties. option to purchase agreement essentials purchase agreement, an attorney should be contacted to draft the appropriate contract. A broker should never attempt to create an option contract. Agreements for Preemptive Rights A preemptive right gives a party the first right to purchase real property Right of first refusal. is created when a property owner promises to give the contracting party the first chance to buy the property or to match the bona fide offer of a third party, should the owner decide to sell sometime in the future. Rights of first refusal are commonly found in leases. Real estate brokers in North Carolina can legally fill in the blanks on preprinted, standard contract forms. Real estate brokers who are not licensed attorneys may not draft legal contract language for others for compensation (unlawful practice of law). If North Carolina brokers offer preprinted contract forms , they must contain the mandated 19 items enumerated in NCREC Rule A.0012. A real estate sales contract essential part 1 ◾is usually accompanied by an earnest money deposit held in trust or escrow account to avoid commingling with broker's own funds A real estate sales contract essential part 2 ,◾contains contingencies or conditions to the sale (such as property sale contingencies or seller's lienholder's approval for a short sale) that must be stated in the contract A real estate sales contract essential part 3 ,◾may provide for the purchaser's right to inspect the property during a due diligence period, and A real estate sales contract essential part 4 ◾includes disclosure forms required by state law or contract terms that must be given, such as the residential property and owners' association disclosure statement. 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Can a seller back out of a verbal agreement?To be legally binding, both you and the buyer must sign the real estate contract. You can back out without consequences if the contract is still verbal and has not yet been legally signed.
Which listing agreement form should North Carolina brokers use?INTRODUCTION: These guidelines are provided to assist an agent who is completing the Exclusive Right to Sell Listing Agreement (Vacant Lot/Land) (standard form 103) on behalf of the firm with which the agent is affiliated.
Which contract does not have to be in writing to be enforceable in North Carolina?In North Carolina, an oral contract is enforceable except in limited situations governed by the statute of frauds.
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Is it normal to use a verbal agreement to sell real estate in North Carolina quizlet?
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