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Property II
University of Toledo School of Law
Kennedy, Bruce M.

Property II

I. Transfers of Land
A. Overview of Land Sale & Land K
1. Four stages of a land sale
(1) Finding the buyer
(a) Seller (S) selects real estate broker – aka listing agent (LA) to represent S in the sale
(b) S and LA enter into listing agrmt – Terms:
(i) LA agrees to find a buyer willing to pay a stated price acceptable to S
(ii) S agrees to sell
(c) B makes offer to purchase
(i) Form of offer = written K that satisfies SF, with condtns:
(a) Physical condtn of prpty
(b) Financing
(c) State of title– S must deliver marketable title to B
(d) If any condtns fail, B walks away w/earnest money
(ii) With k, B delivers earnest money
(iii) S signs K if he agrees to sale
(2) Negotiating the land K
(a) Agents typically represent B & S.
(3) Preparing for closing
(a) Between K formation & closing is called the “executory period”
(b) B & S both have things to do during this period
(c) B will sign promissory note & execute mortgage to secure repayment of loan
(d) During executory period, B will evaluate the state of the title
(i) Option 1- attorney search & certification of Title
(ii) Option 2- attorney review of title abstract prepared by a title abstract company (TAC)
(iii) Option 3- (supplemental to 1 or 2): Title Insurance
(4) Closing the transaction
(a) Closing supervised by attorney or escrow agent
(b) Generally, at closing
(i) Title conveyed from S to B by delivery of deed
(ii) Loan is made by lender & full purchase price is paid by B to S
(iii) LA and CB are paid their commission
(iv) Deed and mortgage will both be recor

(1) open listing agrmt- gives no exclusive right for agent to sell prpty
(2) exclusive agency K- forbids S fro selling the house through another agency, but doesn’t prevent S from finding own B
(3) exclusive right to sell agrmt- forbids anyone other than la from selling prpty

B. Role of Broker
1. Legal duties that broker owes to buyer & seller
a) Fiduciary duty of loyalty, good faith, competence owed to Seller
b) No fraud or conflict of interest
2. When is a commission due?
a) CL Rule- commission due when K is signed (Ohio)
b) Progressive Rule- commission due at closing
c) Or expressly agreed on time between parties
C. Forming the Land K (Statute of Frauds)
1. rqmts of SF
a) in writing, essential terms, signed by party agnst whom enfrcmt is sought
b) can be evidenced by single memorandum or series of related docs, but must indicate a final agrmt
c) don’t need full legal description in land K (but do in the Deed)
d) must be adequate to identify the land with REASONABLE CERTAINTY
(1) What if description is incomplete? May be cured by parol evidence.
(2) What if acreage is inaccurate? May fail if substantial inaccuracy.
(3) What if price not states? Not necessarily fatal, but probably is unless parties agreed to reach price later.
(4) If no closing date stated, closing is in rsnbl time.
Rule- SF won’t interfere if agrmt is already performed; SF won’t undo a fully executed oral agrmt