Describe the characteristics of the 3 major types of listings Describe at least 3 statutory requirements for listing agreements Distinguish between a listing broker's employment to find a purchaser and to effect a sale List the 4 types of legal contracts the licensee may prepare Copyright Gold Coast Schools
2
Learning Objectives
List 4 documents that the licensee can use to gather information for preparing a contract Describe the differences between a tenancy by the entireties, a joint tenancy and a tenancy in common Specify what steps are desirable to protect the parties if the buyer takes occupancy before or after the closing date Copyright Gold Coast Schools
3
Learning Objectives
Describe the differences between an option contract and a right of first refusal Describe the effects of Johnson v. Davis Supreme Court ruling on real estate practice in Florida Define the differences between a lease option agreement and a lease purchase agreement Copyright Gold Coast Schools
4
Entitlement to Commission
A condition of employment must exist for a broker to be entitled to a commission Listing agreements with sellers
Copyright Gold Coast Schools
5
Types of Listings
Open listing
Given to many brokers Only broker who brings a ready, willing and able buyer is entitled to a commission Unilateral contract, seller is obligated
Copyright Gold Coast Schools
6
Types of Listings
Exclusive agency listing
Allows the seller to sell without owing the listing broker a commission The listing broker is entitled to a commission if any brokerage firm sells the property
Copyright Gold Coast Schools
7
Types of Listings
Exclusive right of sale listing
The broker is entitled to a commission no matter who sells the property The most widely used listing
Copyright Gold Coast Schools
8
Types of Listings
Net listings
Seller agrees to accept a minimum amount Any excess is the broker’s commission Unjust enrichment Customary commission Legal in Florida
Copyright Gold Coast Schools
9
Written Listing Agreements
Rules
Definite expiration date May not be automatically renewed Signed copy to owner within 24 hours
Copyright Gold Coast Schools
10
Entitlement to Commission
Procuring cause
Find a purchaser — ready, willing and able buyer Effect a sale — deal must close
Copyright Gold Coast Schools
11
Purchase and Sale Contracts
Unauthorized practice of law Statute of Frauds
The sale of any interest in real property must be in writing to be enforceable
Copyright Gold Coast Schools
12
Electronic Commerce
Electronic signatures are legally enforceable Encryption is a problem Not commonplace yet
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Documents Necessary
Seller documents
Deed Title policy Survey - shows encroachments, easements and setback violations Mortgage Zoning
Copyright Gold Coast Schools
14
Provisions of Real Estate Contracts
Contract for sale and purchase
FAR/BAR widely used for routine residential transactions Contract date – –
“Time is of the essence” Use realistic times
Copyright Gold Coast Schools
15
Parties to the Contract
Seller
Both husband and wife should sign –
Even if only one owns homestead property
Buyer
Each buyer should be named Each buyers should sign
Copyright Gold Coast Schools
16
Types of Ownership
Sole owner
Called owner in severalty Sole and separate owner – –
Married If homestead owner is survived by a spouse and lineal descendants (remaindermen)
Copyright Gold Coast Schools
17
Types of Ownership
Joint tenancy versus tenancy in common
Joint tenancy has the characteristic of survivorship Tenancy in common has the characteristic of inheritability
Tenancy by the entireties
Husband and wife Characteristic of survivorship Simultaneous conveyance
Copyright Gold Coast Schools
18
Co-ownership Tenancy in Common
Unities of title Parties Survivorship
Same or different Two or more No Second most common
Joint Tenancy
Tenancy by the Entireties
Same
Same
Two or more
Husband and wife
Must state
Yes
Copyright Gold Coast Schools
Most common 19
Earnest Money Deposit
Not required with a real estate contract Entered on the real estate contract A broker is not required to have an escrow account A broker is not responsible for a returned escrow check if timely deposited Post dated checks require the seller’s approval and must be noted on the contract Copyright Gold Coast Schools
20
Earnest Money Deposit
Subsequent additional earnest money Notes as earnest money Old earnest money for new contract Licensee as buyer
Copyright Gold Coast Schools
21
Provisions of Real Estate Contracts
Legal description is an essential element of the contract Purchase Price Method of payment
Copyright Gold Coast Schools
22
Financing Terms
Buyer financial statement Buyer prequalification Time limit
Use reasonable time frame
Owner occupied Conditional on buyer loan Loan documents
Copyright Gold Coast Schools
23
Financing Terms
Cash Sale Seller to carry first mortgage
Due on sale clause Balloon payment Reserves
New conventional mortgage Straight second mortgage FHA Adjustable Loan Assumption Copyright Gold Coast Schools
24
Chattel and Fixture Inclusions
Inaccurate or incomplete descriptions of personal property can render the contract unenforceable Personal property itemized in the contract with stated amounts is subject to sales tax A closing date is not a legal requirement of a sales contract
Copyright Gold Coast Schools
25
Provisions of a Contract
Evidence of Title
Time to examine title
Date of closing Proration of expenses Possession of Property Time allowed for acceptance Type of deed
Copyright Gold Coast Schools
26
Remedies for Contract Breach
Liquidated damages - available to a seller when a buyer defaults Rescission on breach Compensatory damages Specific performance
Copyright Gold Coast Schools
27
Miscellaneous Issues
Special assessment
Government lien Seller usually pays lien if improvement completed Buyer assumes pending liens unless work is substantially completed
Copyright Gold Coast Schools
28
Miscellaneous Issues
Licensee acting as buyer or seller
Disclose – – –
Information That licensee no longer represents the seller License status in contract
Provide a no brokerage relationship disclosure Licensee may accept a commission
Copyright Gold Coast Schools
29
Miscellaneous Issues
Contingent on sale of buyers’ properties Right of first refusal Contingent on property inspection Conditional on spouse’s approval Signing and acknowledgement Number of copies needed Copyright Gold Coast Schools
30
Disclosure
Psychologically impacted or stigmatized properties
Scenes of murder, suicides or are alleged to be haunted Disclosure is not required
Occupant infected with HIV or AIDS
Not a material fact Disclosure violates Florida law
Copyright Gold Coast Schools
31
Disclosure
Homeowners’ association Ad Valorem Tax Disclosure Radon gas Property disclosure
Lead based paint – – – –
Residential building built prior to 1978 Information pamphlet Seller must disclose presence of lead based paint if seller knows Buyer can inspect
Copyright Gold Coast Schools
32
Disclosure
Transaction fees Energy-efficiency brochure Building code violations
Copyright Gold Coast Schools
33
Other Contracts
Lease purchase agreement Option contract
Unilateral contract, optionor bound Requires substantial or adequate consideration
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