Anatomy of a Real Estate Transfer 1

Question 1

The Anatomy of a Real Estate Transfer
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Answer 1

1. Oral Negotiations/ Offer in Writing

Question 2

The Anatomy of a Real Estate Transfer
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Answer 2

2. Purchase Agreement

Question 3

The Anatomy of a Real Estate Transfer
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Answer 3

3. Financing

Question 4

The Anatomy of a Real Estate Transfer
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Answer 4

Title Analysis

Question 5

The Anatomy of a Real Estate Transfer
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Answer 5

5. Due Diligence

Question 6

The Anatomy of a Real Estate Transfer
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Answer 6

6. Closing

Question 7

The Anatomy of a Real Estate Transfer
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Answer 7

7. Record Deed and Mortgage

Question 8

The Anatomy of a Real Estate Transfer
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Answer 8

8. Secure Possession

Question 9

Showing of Letter of Credit / Commitment Letter / Pre-approval Letter.

Verbal Negotiations of price, down payment, method of finance, closing date, and time of occupancy.

What does this refer to in: The Anatomy of a Real Estate Transfer?

Answer 9

1. Oral Negotiations / Offer in Writing

Question 10

Showing a letter of credit

Answer 10

Oral Negotiations/ Offer in Writing

Question 11

Commitment Letter

Answer 11

Oral Negotiations/ Offer in Writing

Question 12

Pre-approval Letter

Answer 12

Oral Negotiations/ Offer in Writing

Question 13

Verbal Negotiations of Price

Answer 13

Oral Negotiations / Offer in Writing

Question 14

Method of Finance

Answer 14

Oral Negotiations/ Offer in Writing

Question 15

Closing Date

Answer 15

Oral Negotiations/ Offer in Writing

Question 16

Time of occupancy

Answer 16

Oral Negotiations/ Offer in Writing

Question 17

When you are interested in looking at property as a potential home buyer you are typically going to have to get a __________ _____________.

Answer 17

Pre-approval letter

Question 18

Ex. 295M house in Naples, Florida. I want to see inside the house but if I contact a relator, they are not going to show it to me because I do not make enough to pay for it and there is probability that I could not follow through with the transaction it would be a waste of their time to show it to me. Home buyer context you have bought homes, and you are familiar with that process.

What does this refer to?

Answer 18

Pre-approval letter

Question 19

If you are representing a business or a corporation, they may have instead of a pre-approval letter, a ________ ___ ________ from a lending institution or a ________ _____________ where the bank says we are willing to loan this particular entity an amount of money to facilitate the transaction.

Answer 19

letter of credit

commitment letter

Question 20

2.____________ and _____________ of a purchase agreement. Purchase agreement should be ___________ _____ _____ ____________. Examples of the types of provisions that should be included in the purchase agreement include (this list is not all inclusive):

Answer 20

Preparation and Presentation

Drafted By An Attorney

Question 21

Purchase Agreement (a):

Answer 21

Names and addresses of the buyer and seller.

Question 22

Purchase Agreement (a): Names and addresses of the buyer and seller.

It is important to make sure that you have down exactly who is ______ the house and exactly who is ________ it.

Answer 22

selling
buying

Question 23

Purchase Agreement (b):

Answer 23

Type of estate/ ownership held by seller (fee simple absolute, tenancy in common, joint tenancy, tenancy by the entirety) and similarly the type of ownership that the buyer desires to obtain.

Question 24

• Ex. You have a man who has written his name down as the seller and you later find out he is married but the wife didn’t sign the purchase agreement and later you find out in the title search that he actually owns it with his wife as tenants by the entirety and that is a problem because he can’t actually sell it to you because he has to act with his wife because of the way that he owns it.
• Even if he owned it as tenant in common with his brother. You would want the brother to sign off too because you know what, you don’t want to live with the Seller’s brother. That is probably not your plan in life. You want to live there by yourself or with the people you choose. It is important to know how the people own the property and it is important to note how you would like to acquire the property and with whom.

What does this refer to?

Answer 24

Purchase Agreement (b): Type of estate/ ownership held by seller (fee simple absolute, tenancy in common, tenancy by the entirety) and similarly the type of ownership that the buyer desires to obtain.

Question 25

Purchase Agreement (c):

Answer 25

Price minus the amount of the earnest money deposit (usually says “receipt of which is hereby acknowledged.”

Question 26

Purchase Agreement (c):

How much money do you think you should put down as an earnest money deposit?

Answer 26

Best answer is Earnest money deposit should be a big enough to make it look like you are serious about your offer but a small enough amount that it is not going to do you a great harm to walk away from it. 500-1,500 amount.

Question 27

Your ________ _________ _________ is the amount you have to walk away from if you back out of the deal.

Answer 27

Earnest Money Deposit

Question 28

500 to 1500 lets them know you are serious because that is a decent sum of money. What does this refer to?

Answer 28

Earnest Money Deposit

Question 29

__________ _________ _____________ will be deducted from the purchase price if you follow through with the closing but if you decide to back out of the deal and that is on you as opposed to being the seller’s for why you are backing out, you are not going to get to keep it.

Answer 29

earnest money deposit

Question 30

As long as the relator brings a buyer to the table who is ready, willing and able they can get paid even if the sale doesn’t happen. That is why they want a high ________ ___________ ___________.

Answer 30

earnest money deposit

Question 31

Purchase Agreement (d):

Answer 31

Legal Description and Street Address

Question 32

Purchase Agreement (e):

Answer 32

Appliances/ fixtures included or not included

Question 33

Moving – Richard Pryor film – RP and his wife are moving to a new state for work, and they go into a house, and it is beautiful and everything that she likes the owner says we are taking it with us. You think he is kidding, and they buy the house, and everything is gone. He calls him and he said we are taking it with us we recorded the whole thing. What you see is not necessarily what you get look at ______________ to the purchase agreement to see what comes with it. * They may be in the house when you view it and when you show up there is nothing there. You have to clarify what is there. From a fiscal perspective you need to know how much you can offer. If no washer and dryer you may need to go buy one and have less money to put down. It is important to know what comes with it and what doesn’t.

Answer 33

addendum

Question 34

Purchase Agreement (f):

Answer 34

Seller’s disclosure of defects

Question 35

There is a column for IDK on the ________ _________ _____ _________- and most of the time sellers don’t know if the roof leaks or if the stove leaks. They get away with checking the IDK column.

Answer 35

seller’s disclosure of defects

Question 36

Purchase Agreement (g):

Answer 36

Lead based paint disclosure

Question 37

Lead based paint prior to 1977 or 1978 when we presume that the paint has led in it. If you are the seller, there is a pamphlet regarding led based paint that you will hand it out. Either way do not eat the paint. If it is a newer house, it does not have led based paint.

What part of the purchase agreement does this refer to?

Answer 37

Purchase Agreement (g): Lead based paint disclosure.

Question 38

Purchase Agreement (h):

Answer 38

When closing date is and where closing occurs.

Question 39

You want to stipulate when the closing is and where it occurs. If the seller cannot convey the __________ _________ by the closing date the buyer can rescind and get the earnest money deposit back. That becomes the really big issue.

If you are going to have a purchase agreement question in an essay it is going to typically be:

Can the buyer backout? May they rescind? And will they be allowed to get their earnest money deposit back?

Answer 39

marketable title

Question 40

Purchase Agreement (i) :

Answer 40

What happens if the closing date does not occur on time/ default provisions/ return of earnest money deposit?

Question 41

It is really important to be very specific about what constitutes _________, and I would encourage you to be really careful in the purchase agreement if you’re representing someone buying or you’re buying, because there is typically really tight time frames.

There is typically really tight timeframes closing is usually 4-6 weeks maybe 2 months and you have to get a home inspection and within a certain number of days getting the home inspectors report, you are going to have to decide whether or not you want to withdraw your offer based upon what you found out.

We care because it is the second leading cause of lung cancer in America. You need a Radon test and then your home inspector is going to be able to come back in 24 h to collect the results and if the levels are at an unhealthy range you can rescind your offer and then it is going to become contingent upon them installing a Radon remediation system and retesting at their cost to prove to you that it is now healthy because you do not want to buy a death house.

That default could be trigged because you have a home inspection, and you have a certain amount of days you want to complain about it. Can be triggered in the default provision

Answer 41

default

Question 42

Purchase Agreement (j):

Answer 42

Type of deed to be conveyed, disclosure of restrictions

Question 43

In the purchase agreement there is going to be a boiler plate super basic vanilla provision and it is going to say that this property is subject to all _________ _____ ___________. The legal implication means that various private restrictions think HOA rules get recorded and they get recorded at the public records office.

Answer 43

Restrictions of Record

Question 44

__________ _____________ make title unmarketable but not if you agree to them. The place in the purchase agreement that says subject to all restrictions of record means that you just agreed to all of those recorded rules and restrictions from the HOA.

Answer 44

Private Restrictions

Question 45

You want if you are the purchaser to have all the rights to the property and you want the property to be _______________. Which means you don’t want anybody else to have an interest in it. You don’t want it to be subject to unpaid taxes, or liens or any mortgages that aren’t going to be paid off at the closing. You want to own it free and clear.

Answer 45

unencumbered

Question 46

Typically, the purchase agreement will stipulate that marketable title is to be conveyed. But if it is not stipulated it’s presumed because _________ ___________ is the industry standard.

Answer 46

Marketable title

Question 47

__________ _________ is the industry standard.

Answer 47

marketable title

Question 48

Purchase Agreement (k):

Answer 48

Type of title to be conveyed. Who will be procuring and paying for the title commitment and owner’s policy.

Question 49

With regard to the type of title to be conveyed the law presumes ___________ __________. If it is not listed that is what the standard is, ____________ __________.

Answer 49

marketable title

marketable title

Question 50

If your purchase agreement says that it is ________________________________________ and when you buy your house there were 70 pages on my house in Fla. That is a lot of rules that you have to follow regarding paint color, and you need to know what the rules are before you agree to them.

Answer 50

subject to all restrictions of record

Question 51

Should you take the sellers word for the fact that they own the property?

Answer 51

NO!

Question 52

In order to verify that the seller owns the property hire someone to do a _________ __________ and they look at the public records office and they search back however far the jurisdiction requires.

Answer 52

title search

Question 53

In that process the title company or the attorney is going to want to be compensated. Typically, when a title company does a search the purpose of the search is to determine whether or not they are willing to issue an __________ ___________ _____ _____________ ___________.

Answer 53

Owner’s policy of title insurance

Question 54

The ___________ ___________ _____ _________ ____________ is the title company saying that you asked us to find out if Bob owns the property and we done the research and we are so confident that Bob owns the property that if we are wrong we will pay you the damages. That is what an ________ ____________ _____ _________ ___________.

Answer 54

Owner’s policy of title insurance

Owner’s policy of title insurance

Question 55

My opinion as a person who represents real estate developers who are buying property. It is good idea for the seller to pay for the owner’s policy of title insurance because the seller is the one trying to prove that they own it. Until those houses my client was trying to construct were built and then once the client built the houses and then the new perspective was we don’t need to pay for all that. We are going to pay for a_________ _______________ – title company goes and does the research, and they are going to tell you we will issue a policy of title insurance if you do these things. That is cheaper.

Answer 55

title commitment

Question 56

Depending on who you represent you negotiate differently as to who should pay.

Bare minimum seller should provide to the buyer a _____________ for ___________ _____________which is a product sold by a title insurance company and that will show that a search was done and that the seller appears to be the owner.

Answer 56

commitment for title insurance

Question 57

__________ ___________ is a different product and not every title insurance company offers them because it exposes then to greater liability.

Answer 57

title abstract

Question 58

Ex. My client was considering buying different parcels of land. We didn’t want to buy the ones that had really messed up titles. We reached out to the title company and asked if they would do a title commitment basically a search for these 20 properties and we will pay for the searches. We looked at them and 1 had made reference to a random mortgage from Great Aunt Maud or something weird. The title company said no I don’t have to send that to you. You paid for a title commitment, but the title commitment we do the search, but it is for our benefit to decide if we are willing to issue you an owner’s policy. The search is for us. What do you have to pay for to give me what you find.?_________ ________. With a title abstract you don’t get any insurance, but we give you everything that we find in the search, and we will physically hand you the documents. Different product.

Answer 58

Title abstract

Question 59

Title Product – ________ _______. The bank was financing the purchase of the home. The bank is very interested in making sure that the title is not messed up. The buyer who will be paying for that because the buyer is trying to make the bank happy because the buyer is trying to make the bank give them the money to buy the property.

While it is negotiable whether or not the seller is going to pay for the owner’s policy or the buyer is going to pay or we are going to split it, the buyer is always going to pay for the __________ ________ because the buyer is trying to make their own bank happy.

Answer 59

Lender’s policy