Missouri Real Estate Exam: Contracts and Agency & Financing

Statute of Frauds - ANSWER-Requires a real estate contract to be in writing in order to be enforceable real estate contracts - ANSWER-A contract that sets forth all details between the buyer and seller for the purchase and sale of real estate implied contract (ostensible agreement) - ANSWER-a contract demonstrated by actions or conduct Expressed contract - ANSWER-a contract that may be oral or in writing. The parties state terms and show intentions in words bilateral contract (sales contract) - ANSWER-an agreement in which both parties promise to do or not to do something. One person's promise is another person's consideration. If you give me money, i'll give you my house executory - ANSWER-A contract in which parties have not fully performed their promises. I'll give you commission IF you sell my house executed - ANSWER-a contract that has been completely performed deed - ANSWER-a contract from the seller Four essentials for a contact to be present - ANSWER-competent parties, legal subject matter, consideration for the promises contained in the contract, mutual assent (in missouri, property description and in writing and signed is also required) competent parties (contract) - ANSWER-Age 18, be of sound mind. In a corporation someone must be leaglly empowered Legal subject matter (contract) - ANSWER-a contract for a legal purpose is void and is treated as if never existed consideration (contract) - ANSWER-the obligation that each party makes to the other in order to make the contract enforceable. (the whole sales price) mutual assent/offer and acceptance (contract) - ANSWER-a "meeting of the minds" between the parties. They must have objectively appeared to reach an agreement. legal description - ANSWER-deeds and documents offer to purchase - ANSWER-sales contract when buyer has his name on the contract contract for sale - ANSWER-the contract is accepted and signed by seller and is delivered to the buyer equitable title - ANSWER-The right of buyer to obtain full, legal title to real estate, provided the terms and conditions of the document (usually a contract for sale) are fulfilled (signed). voidable contract - ANSWER-a contract is enforceable against one party but not the other void contract - ANSWER-a contract for illegal purpose. no contract at all unenforceable contract - ANSWER-a contract that was valid when made but cannot be enforced by a court. (many oral contracts) breach/default - ANSWER-failure to perform according to the terms of the agreement; gives the damaged party the right to take legal action foreclosure - ANSWER-when a lender takes over ownership of a property from an owner who has failed to make loan payments statute of limitations - ANSWER-a statute prescribing the time period during which legal action can be taken strawman - ANSWER-one who purchases property for another so as to conceal the identity of the real purchaser assignment - ANSWER-the transfer right, title, and interest in the property of one person (assignor) to another (assignee). There are these for mortgages, sales contracts, contracts for deeds, leases, and options lease option/lease with option to buy - ANSWER-a lease clause that gives the tenant the option to purchase the property under specific conditions fiduciary - ANSWER-position of trust: faith, trust, confidence salesperson duties - ANSWER-ACOLD: accounting, care, obedience, loyalty, disclosure general agency relationship - ANSWER-when the principal delegates on going tasks and duties within a particular business (more than one task) special/limited agency relationship - ANSWER-when the principal delegates authority to conduct a specific activity, after which the relationship terminates. listing agreement - ANSWER-employment contract between the seller and the buyer open listing - ANSWER-An agreement between an owner and many brokers. If a broker produces a ready willing, and able buyer, a commission is due. However, the owner still has the right to sell his/her property and is not obligated to pay a commission to anyone. exclusive listing - ANSWER-Under this listing arrangement, the broker employed is entitled to a commission no matter who sells the property during the listing period. (Even the Seller) Exclusive agency - ANSWER-principal agrees to work with one agency for a stated period of time (no commission earned if client does own deal) exclusive right to sell - ANSWER-one principal broker is designated to represent the seller and receive a commission when the buyer is found, regardless of who finds the buyer. agency coupled with interest - ANSWER-when the real estate licensee is a partner in the ownership of the property subagency - ANSWER-The agency role of a broker is extended to one or more additional brokers, who also become a fiduciary of the principal and are empowered to act on his or her behalf. The subagent shares any commission with the original broker. This agency chain can extend through multiple agents in the case of multiple-list services. multiple listing - ANSWER-Marketing service in which many brokers pool all of their listings and establish procedures for sharing commissions. dual agency - ANSWER-An agency relationship in which the agent acts concurrently for both of the principals in a transaction. designated agency - ANSWER-An agency relationship where a licensee is assigned by a broker to represent a buyer or seller in a transaction, usually in an in-company dual agency situation. (broker has to sign) customer - ANSWER-third party latent defect - ANSWER-something that is wrong but cant be identified but the inspector patent defect - ANSWER-something that is wrong and is visible to the inspector surety bonds - ANSWER-insurance that covers an owner against financial losses resulting from an employee's criminal act while performing assigned duties (stealing) escrow account - ANSWER-an account in which money is held in trust until it can be delivered to the designated party 1866 - ANSWER-civil rights act- race, color, religion- prohibits all discrimination against race, Jones VS Mayer 1968 - ANSWER-fair housing act- all citizens have the right to inherit, buy, sell, or lease all real and personal property. (natl. origin) 1974 - ANSWER-housing and community development act- prohibition against discrimination based on gender 1988 - ANSWER-federal fair housing prohibited discrimination against familial status and handicap persons HUD - ANSWER-housing of urban development blockbusting/panic pedaling - ANSWER-Illegal practice of inducing homeowners to sell their properties by telling them that a certain people of a certain race, national origin or religion are moving into the area steering - ANSWER-Illegal practice of channeling home seekers to particular neighborhoods based on race, religion, national origin; an illegal limitation of a purchaser's options redlining - ANSWER-Illegal practice of refusing to make mortgage loans or issue insurance policies in specific areas for reasons other than economic qualifications of applicants anti-trust laws - ANSWER-price fixing, certain types of boycotts, allocation of customers or markets restrictions on competitions in shopping center leases, restraints, tie-in arrangements, acceleration clause - ANSWER-A provision in an installment loan contract that gives the seller the right to declare the whole balance due if the buyer misses even one installment payment alienation clause - ANSWER-Also know as "due on sale" clause permits lender to declare balance of loan immediately due if property is sold; prevents loan assumption without lender approval deed of trust - ANSWER-A deed to real property, which serves the same purpose as a mortgage, involving three parties instead of two. The third party holds naked title for the benefit of the lender. Beneficiary (Lender), Trustor (Borrower), Trustee (Third Party) title theory - ANSWER-Some states interpret a mortgage to mean the lender is the owner of mortgaged land. Upon full payment of the mortgage debt, the borrower becomes the landowner.