chapter 9 30 hr broker transition course

Chapter 9 Contracts and Conveyances : 

Chapter 9 Contracts and Conveyances © 2011 by Kaplan, Inc. All rights reserved. Salesperson to Broker Transition Course 30 Hrs

Quinlan and Tyson Realty vs. Chicago Bar Ass. et.al: 

Quinlan and Tyson Realty vs. Chicago Bar Ass. et.al © 2011 by Kaplan, Inc. Page 155 Use Pre Printed Contracts Fill In Blanks Strikeout Add Riders No Practice Law Brokers Lawyers No “Opinion” of Value Prepare Documents Deeds, etc. Opinion of tile Draft Clauses

Listing Agreements (personal services contract between a Sponsoring Broker and a Seller): 

Listing Agreements (personal services contract between a Sponsoring Broker and a Seller ) © 2011 by Kaplan, Inc. Page 155-6 Owner Agent Agents Exclusive Right To Sell Exclusive Agency Open Listing

Listing Agreements ( personal services contract between a Sponsoring Broker and a Seller): 

Listing Agreements ( personal services contract between a Sponsoring Broker and a Seller ) Multiple listing (put in MLS, can’t be an open listing) Expiration of listing period Broker protection clause © 2011 by Kaplan, Inc. Page 156 Illinois: No Uniform or State Approved Listing Contract MLS’s many types of “Input” Sheets (fig5.5)

Listing Agreement Disclosures: 

Listing Agreement Disclosures Material facts ( Chpts 1 5) Special interest (Chpt 5) Special compensation (Chpt 5) Earnest money and purchaser default (Chpt 5) Property condition (Chpt 5 and 6) © 2011 by Kaplan, Inc. Page 157

Listing Agreement Issue: Changes: 

Listing Agreement Issue: Changes Once finalized and signed by the sponsoring broker and the seller, Illinois law prohibits the licensee from making any addition to, deletion from, or alteration of the written listing without the written consent of the seller. © 2011 by Kaplan, Inc. Page 158

Illinois Listing Agreement Issues: 

Illinois Listing Agreement Issues The list price of the property The agreed-upon amount of commission and the time of payment The time duration of the agreement The names of the broker and the seller The address or legal description of the property Minimum services A statement of nondiscrimination A statement regarding antitrust A statement of the Designated Agent © 2011 by Kaplan, Inc. Page 158 Illinois: No Uniform or State Approved Listing Contract

Broker’s Authority and Responsibilities : 

Broker’s Authority and Responsibilities Place a sign on the property? Advertise and market the property through traditional methods or by using social media? Authorize buyers’ brokers through a multiple listing service (MLS) and the Internet? Allow the licensee to show the property at reasonable times and on reasonable notice to the seller? Accept earnest money deposits on behalf of the seller, and what are the broker’s responsibilities in holding the funds? © 2011 by Kaplan, Inc. Page 158

Broker Authority and Responsibilities: 

Broker Authority and Responsibilities Names of all parties to the contract Brokerage firm Listing price Real property and personal property Leased equipment Description of the premises Proposed dates for closing and buyer’s possession © 2011 by Kaplan, Inc. Page 159 Have Your Broker (or real estate board) Go Over Your Listing Contract Line by Line.

Closing Issues : 

Closing Issues Evidence of ownership Encumbrances Home warranty program Commission Illinois requirements on changes to commission Antitrust Word ( always Negotiable) Termination © 2011 by Kaplan, Inc. Page 160

Closing Issues (cont.): 

Closing Issues (cont.) Broker Protection Clause Warranties by owner Indemnification wording Fair housing language Minimum services Signatures of the parties Date the contract is signed © 2011 by Kaplan, Inc. P.161-162

Buyer Rep Agreements (personal services contract between a Sponsoring Broker and a Buyer): 

Buyer Rep Agreements (personal services contract between a Sponsoring Broker and a Buyer ) © 2011 by Kaplan, Inc. P162-163 Buyer Agent Agents Exclusive Buyer Agency Exclusive Agency Buyer Agency Open Buyer Agency Buyer Protected from Possible Commission Payment

Termination of Broker Employment Agreements: 

Termination of Broker Employment Agreements When the contract is fulfilled Expiration Destruction, Zoning change ,Condemnation by Eminent Domain Bankruptcy or Foreclosure Mutual Agreement Death of Incapacity of either party Breach by Either Party © 2011 by Kaplan, Inc. Page 163-4

Sales Contracts: 

Sales Contracts Forms intended to be binding real estate contracts must indicate that in the heading of the form. Cannot use an “ Offer to Purchase” form as a binding real estate contract. Ripening the contract ( from “Offer” and “counter offer to “Sales Contract” Parts of Sales Contracts (p. 165-179) Earnest money deposits (p 179) © 2011 by Kaplan, Inc. Page 164 Sales Contract Fig 9.1

Contract Negotiation: 

Contract Negotiation Offer and acceptance (mutual assent) Multiple offers Contingencies Additional conditions that must be met before the contract is enforceable) Amendments and Addendums (add without changing any Original terms and conditions © 2011 by Kaplan, Inc. Page 179-181 Present ALL Offers

Contract Termination or Cancellation: 

Contract Termination or Cancellation Professional inspections Mortgage contingency The attorney review © 2011 by Kaplan, Inc. Page 182-183

Other Contract Provisions: 

Other Contract Provisions Fixtures and personal property Possession Short sales Statutory disclosures Condominium disclosures Title Contingencies © 2011 by Kaplan, Inc. Page 183-4

Other Contract Provisions: 

Other Contract Provisions Termination Partial Performance Impossibility if Performance Mutual Agreement Operation of Law Rescission © 2011 by Kaplan, Inc. Page 184-5 Return all documents and $$ Earnest Deposit and Return – Page 187 ( All Parties Sign First)

Escrow Funds: 

Escrow Funds Moneys, promissory notes, security deposits which benefit of the parties to the real estate transaction Escrow accounts Branch office escrow accounts Time of deposit or disbursement (page 187) Escrow account rules and records Interest Bearing only with written permission of he parties © 2011 by Kaplan, Inc. Page 185-7 NO COMMINGLING IDFPR Consent to Examine And Audit Special Accounts Form

Escrow Funds: 

Escrow Funds © 2011 by Kaplan, Inc. Page 186 Keep A Copy Summary of Escrow Account Rules

Escrow Records: 

Escrow Records Journal (page 189) Ledger Card (page 190 Monthly Reconciliation (p192) Master Account Logo (page 193) © 2011 by Kaplan, Inc. Page 188 Next “business day "after contract acceptance

Property Management Agreement: 

Property Management Agreement Description of the property Period the agreement covers and specific provisions for termination Definition of the management’s responsibilities Statement of the owner’s purpose Extent of the manager’s authority Reporting Management fee Allocation of costs Antitrust provisions Equal opportunity statement © 2011 by Kaplan, Inc. Page 184 General Agency

Chapter 9 Contracts and Conveyances Review Quiz: 

Chapter 9 Contracts and Conveyances Review Quiz © 2011 by Kaplan, Inc. Page 199-200