23.2 - Purchase & Sale II Flashcards
(15 cards)
What are the key steps on closing day?
- Verify buyer/seller identity (photo ID).
- Sign & notarize transfer documents (deed, mortgage, note).
- Buyer wires funds (down-payment + closing costs).
- Lender funds loan to escrow (if any).
- Settlement agent disburses proceeds & pays liens.
- Deed & mortgage are recorded with county.
- Title insurance policies issued.
- Possession & keys delivered.
Why do many closings still require in-person attendance?
Deed conveyance and some loan docs must be wet-ink signed in the presence of a notary & (in some states) witnesses.
What are the four major cost buckets due at closing?
• Down-payment (often ≈ 20 %)
• Legal/administrative fees (title insurance, recording, attorney)
• Prorations (taxes, HOA, utilities)
• Startup expenses (utility deposits, insurance binders).
What is the importance of insurance coverage effective at closing?
Damage identified before the policy start date may be excluded; lenders also require proof of hazard insurance to fund.
What is an assignment sale?
Original buyer sells (assigns) their purchase contract to a new buyer before closing; common in pre-construction markets.
What is the purpose of setting a listing price?
Starting point for marketing & negotiation; signals seller expectations yet not binding on final sale price.
What are the outcome possibilities relative to list price?
Final price can be above, below, or equal to list depending on market response and negotiation.
What are the effects of setting a low listing price?
• Attracts more traffic/competition → bids may rise.
• Can shorten time-on-market—useful if seller is time-constrained.
What signals are sent by a high listing price?
Indicates seller’s willingness to wait, belief in superior property attributes, or lower need to sell quickly.
What is the well-known trade-off in listing strategy?
Higher price ↔ longer marketing time; sellers balance top-dollar goal vs. speed/liquidity.
Why do real-estate sellers generally need only one buyer?
Property is heterogeneous & indivisible; once a deal is struck the asset is gone—affects negotiation tactics.
What is the strategy behind listing for $1 (or ‘contact for price’)?
Extreme low list creates buzz & maximizes inquiries; relies on auction-like competition to discover true market value.
Is a ‘house lottery’ (raffle) a valid sale method?
Usually illegal without a gaming license; heavily regulated as gambling, so rarely a lawful sales strategy.
What are the legal issues if a seller tries to raffle a house?
Must comply with state lottery/gaming laws; failure could void transfer and incur fines or criminal liability.
Beyond price, what are two other listing-strategy levers?
- Marketing channel/MLS exposure.
- Incentives (buyer credits, furniture inclusion, flexible closing date).
