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

Anatomy of a Sale of Land

Finding the buyer

Seller selects a broker
Market house to prospective buyers

Negotiating the Land K

Makes an offer

Offer is condition re: (any fail no deal

Physical condition of property
Financing
State of title

Counteroffers may occur and finally buyer signs K formed

Preparing for closing and

Between K formation and closing is “gap” or “executory period”
Executory period—checks out house, finds financing, evaluates the state of title

Closing the transaction

Title is conveyed from S to B (delivery of deed)
Loan is made from lender to B
Full price is paid by B to S
From purchase price LA and CB are paid their commissions
Ancillary tasks are performed

Anatomy of a Sale of Land: Broker’s Role

o A broker’s K gives him the exclusive right to sell the property at the price or terms in the K or at any other price or terms agreed on by the parties. A broker earns a commission only when they buyer pays the purchase price. However, the seller i

uding obligation of care, skill, diligence, loyalty and good faith
o Right to commission
§ General rule: LB earns commission when…
· Traditional view: LB procures a ready, willing and able Buyer who signs the land K
· Modern: LB procures a Buyer who closes the sale and takes title to the property
§ Special rule 1:
· Modern: broker may earn commission w/o conveyance—if deal fails to close b/c of S’s fault
§ Special rule 2:
· Traditional: Parties by listing K can agree that broker commission is earned on occurrence of a different event if the listing K is FAIRLY NEGOTIATED

Anatomy of a Sale of Land: Attorney’s Role

i After seller has accepted buyers offer à Attorney will
a Draft sale K
b Examine title
c Draw up deed
d Close transaction
Written Contract Required (SOF)

o The statute requires that a K for the sale of land be in writing and signed by the party to be charged—writing can be informal and may consist of several documents
Must however contain all essential terms (parties identification, property description, and terms and conditions of the sale including price—(the price must be in the writing if it has been agreed upon if not a court may imply an agreement to pay a reasonable price))