Chapter 6 contracts and title closing
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CHAPTER 6 CONTRACTS AND TITLE CLOSING PowerPoint PPT Presentation


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CHAPTER 6 CONTRACTS AND TITLE CLOSING. This chapter introduces students to the types and contents of contracts that are common in real estate sales transactions and discusses the title closing process. Necessary elements of a contract:. Offer and acceptance Consideration Capacity of parties

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CHAPTER 6 CONTRACTS AND TITLE CLOSING

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Chapter 6 contracts and title closing

CHAPTER 6CONTRACTS AND TITLE CLOSING

  • This chapter introduces students to the types and contents of contracts that are common in real estate sales transactions and discusses the title closing process.


Necessary elements of a contract

Necessary elements of a contract:

  • Offer and acceptance

  • Consideration

  • Capacity of parties

  • Lawful purpose

  • Writing requirement

    • Statute of frauds

    • Partial performance


Real estate sales contracts

Real estate sales contracts:

  • Groundwork for negotiating a sales contract

    • Negotiation stage

  • Sales contract (Figure 11.1)

    • Description of property and fixtures

    • Purchase price

    • Title

    • Escrow

    • Provisions for earnest money

    • Property destruction

    • Miscellaneous provisions

    • Broker's commission

    • Conclusion to the contract


Performance and breach of contract

Performance and breach of contract:

  • Breach

  • Specific performance

  • Remedies for breach of contract


Option to buy contracts

Option-to-buy contracts:

  • A contract that gives one party the right, but not an obligation, to purchase a property within a specified time horizon at a specified price.


Contract for deed land contract or agreement for deed

Contract for Deed(Land Contract or Agreement for Deed)

  • Installment payments over time

  • Seller retains title until the agreed amount is paid.

  • If payment is missed, buyer may lose property; however, many states say buyer is entitled to a refund of their equity (but not interest paid).


Title closings

Title Closings:

  • Buyer’s responsibilities

    • Financing the purchase

    • Obtaining a title opinion

    • Having the property surveyed

    • Obtaining property insurance

    • Inspecting the property

    • Other responsibilities


Title closings con t

Title Closings: con’t

  • Seller’s responsibilities

    • Preparing the deed

    • Removing encumbrances

    • Paying the seller’s loan

    • Obtaining a termite bond

    • Other responsibilities


Title closings con t1

Title Closings: con’t

  • Cost at Closing

    • Buyer’s costs

    • Seller’s costs

    • Pro-ration of homeowner’s costs

  • Understanding the settlement statement

    • HUD Uniform Settlement Statement (Fig. 15.1)

    • Example

  • Parties present at closing

  • Events at closing

  • Escrow closing


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