Property II
Five Steps of Real Estate Transfers (812)
The execution of a contract of sale
inspections of the property and examination of the seller’s title by the buyer
the arranging of financing by the buyer
the closing or ‘settlement’
Recording of the deed and any mortgage or other security instrument which the buyer has executed.
Common Names
Seller Buyer
vendor purchaser Lender
mortgagor mortgagee ( Money)
borrower
Chapter 8: Contracts for the Sale of Land – p. 812-926
Real Estate Brokers (812)
An agent who act as an intermediary or negotiator, between prospective buyers and sellers
The seller is obligated to pay a commission to the broker, usually a percentage of the actual sales price.
Notes (815)
i. The usual view does not allow the broker to force the sale to take place if the seller refuses to go forward.
1. May be allowed to force under the buyer for specific or part performance.
ii. Installment in land Contract (815)&(826) {see section B}
1. Seller finances buyer’s purchase
2. One step above renting; eventually owns title
iii. 3 Types of Listing Agreements
1. Open- seller will pay commission to broker if the broker produces the sale, but remains with power to sell on own without payment of commission
2. Exclusive agency listing- time certain and authorizes a specific broker, but seller remains in power to sell on own without payment of commission
3. Exclusive right to sell- no matter how the property is sold, a commission is owed to the broker.
a. Nearly all residential properties are listed under the exclusive right to sell
iv. Multiple Listing Services
1. Books with multiple ads for houses made by the local boards of realtors.
Sampling Listing Handout & Exclusive Buyer Handout
Drake v. Hosley ( 817)
i. Exclusive listing agreement
ii. Is a commission is due if the sale doesn’t close?
1. MAJORITY view: (819)
a. a broker is entitled to a commission when he produces a buyer ready, willing, and able to purchase the property on the seller’s terms, even if the sale is not completed
2. minority view: Dobb’s (819) – MODERN TREND
a. Commission shall not be deemed earned unless the contract of sale is performed, unless the default is by the seller.
Notes (821)
i. The common law rule recognizes the broker’s claim for the commission despite the failure to close is still alive and well
ii. If the language in the contracts states that the broker’s commission will come from the proceeds of the closing or any other language stating a closing must occur in order for the broker to obtain the commission, the courts follow the language of the contract regardless of what their view is. ( Florida case)
iii. If there are multiple brokers, under the MLS service, and the seller accepts the offer made by the buyer’s broker and the sale closes, the commission will be divided in accordance to the MLS rules or local bylaws.
iv. It is statutorily required that there is full disclosure whom the broke
)
vi. The Statute of Frauds can be satisfied in multiple documents.
Notes (838)
i. A writing that is not drawn up for the purposes of a contract will suffice and met the requirements of the Statute of Frauds, including, checks, or letters. It can also consist of several writings that can be tied together.
ii. In order for a deed to be considered to fulfill the requirements of the statute of frauds it must be delivered to the buyer.
iii. Essential terms {see above}
1. Not all courts require a price to be stated
2. Identification can be a street address
iv. the person who is the ∆ in the suit has to have signed the writings in order for it to fulfill the statute of frauds requirement
1. Typically only the seller signs the deed to the property
2. A signature may be electronic or a symbol if the signer had the intent to make the signature his assent to the writings. (email signature or letter head)
It is fairly common for real estate sale contracts to fail to satisfy the statute of frauds, especially if there is no real estate agent supervising the matters.
Roundy v. Waner (parents v. daughter) (842)
Issue: whether the ∆ gained the full title of the property in 1968
