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Real Estate sales contracts

Real Estate sales contracts. Sales Contract. Is the most valuable document in real estate transaction The expenses at closing The property included in the deal Price and payment terms No fixed rules on who pays for what- so everything is negotiable Get everything in writing!.

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Real Estate sales contracts

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  1. Real Estate sales contracts Prepared by: Nurbek Ismailov

  2. Sales Contract • Is the most valuable document in real estate transaction • The expenses at closing • The property included in the deal • Price and payment terms • No fixed rules on who pays for what- so everything is negotiable • Get everything in writing! Prepared by: Nurbek Ismailov

  3. Real Estate Contract • Must be 18 to enter a real estate contract • all contracts for the transfer of any interest in real property for more than one year must be in writing and signed by the parties. • Any oral (parol) transfer of an interest in real property for more than one year can convey no more that a tenancy at will. Maryland laws require a 30- day notice to vacate under tenancy at will. Prepared by: Nurbek Ismailov

  4. Contract forms • Real estate sales contracts and other contract forms must always be drafted by attorneys. • “unauthorized practice of law”; which is punishable by law for maximum penalty of $5000 and /or imprisonment for not more than one year. Prepared by: Nurbek Ismailov

  5. Breach of Contract • Suits to enforce a simple contract must be filled within 3 years. • For contracts signed “under seal,” however, the time limit is 12 years. Mention of the word seal or use of the phrase witness my seal in the body of a contract together with the use of the letters L.S. in the signature block create a contract under seal. Prepared by: Nurbek Ismailov

  6. Discrimination • It is illegal to discriminate in the sale of real estate based upon: • race, • sex, • religion or • nationality. • Time limit: 180 days to file a civil suit Prepared by: Nurbek Ismailov

  7. Discrimination Exception. • This law does not apply to single family homes if: • the owner owns a three or fewer homes • there is no more than one sale within twenty four month • the person does not own any interest in more than three homes at one time • no real estate agent or discriminatory advertisement is used. Prepared by: Nurbek Ismailov

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  9. Environmental hazards • Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) • This law puts the cleanup burden on property owners even if they are innocent of causing any pollution. Prepared by: Nurbek Ismailov

  10. Parts of a sales contract • Name of the buyer and the seller • Description of the property (such as address) • The purchase price and how the buyer intends to pay for the property • The amount of down payment • Any covenants, restrictions or conditions Prepared by: Nurbek Ismailov

  11. Parts of a sales contract • Any personal property left to be left with the premises • Any real property to be removed by the seller before the closing (such as storage shed) • The transfer of any applicable warranties on items such as heating and cooling systems or built-in appliances • The identification of any leased equipment that must be transferred to the purchaser or returned to the lessor (such as security systems, cable TV boxes, and water softeners) Prepared by: Nurbek Ismailov

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  13. Homeowners association (HOA) • In some areas, a seller must disclose whether the property is controlled by any HOA rules and regulations. • HOA dues • Covenants and certain restrictions Prepared by: Nurbek Ismailov

  14. Disclosures • Known Defects • Real estate brokers or sales agents must disclose this fact on any contract that they execute for themselves • Deferred water and sewer charges • Ground rent or leasehold interest Prepared by: Nurbek Ismailov

  15. Equitable title • Is created when both parties sign the contract • Places the risk on the buyer • Most contracts in MD has a provision that requires sellers to maintain insurance Prepared by: Nurbek Ismailov

  16. Earnest money deposits • Deposit check is held by a broker in a special account • As a rule, the deposit should be an amount sufficient to:  • discourage the buyer from defaulting; • compensate the seller for taking the property off the market; and • cover any expenses the seller might incur if the buyer defaults. Prepared by: Nurbek Ismailov

  17. Contingencies • Contingency-condition that must be fulfilled before contract becomes enforceable • Financing • Termite Inspection • Home inspections and their impact • Sale of purchasers’ home and any release(kickout) clause Prepared by: Nurbek Ismailov

  18. Disclaimer: • This information is for educational purpose only and use it at your risk! • Consult an attorney and/or CPA when necessary (and to avoid future lawsuits and/or tax audits) Thanks! Prepared by: Nurbek Ismailov

  19. Works cited • Galaty, Fillmore. Modern Real Estate Practice. 17th. Chicago, IL: Dearborn Financial Publishing, Inc, 2006. • Wanda, Mark. Essential Guide to Real Estate Contracts. 2nd. Naperville IL: Sphinx Publishing, 2003. • White, Donald. Maryland Real Estate Practice & Law. 11th. Chicago, IL: Dearborn Financial Publishing, Inc, 2005. Prepared by: Nurbek Ismailov

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