RE Contracts Ch. 11 Special Provisions

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  1. What are special provisions?
    • -to allow the buyer and seller to make factual statements and attend to business details that may arise in a sale.
    • -basically provisions or requests by buyers or sellers that there are not TREC forms for.
  2. What is the number one danger in completing paragraph 11?
    -a licensee practicing law; avoid writing any provision that uses specialized legal terminology or deals with subjects that are legal in nature and have little to do with the physical, monetary, or timing aspects of the contract.
  3. It is best to avoid writing anything in the special provisions.
    true; think through whether it's already in the contract.
  4. Watch out for mentioning of _____ of the parties and adding a ________________ clause. As this can be seen as practicing law.
    • -rights
    • -time is of the essence
  5. If desired by the parties, a special warranty deed provision could be written in by the _______. Since deeds are complex, it is a good idea to consult an _________.
    • -party
    • -attorney
  6. A provision could be drafted by attorney to prohibit an assignment.
    true
  7. The less we use special provisions, the better.
    true
  8. What are some typical uses for Special Provisions based on Parties?
    • -confirm authority to act (need attorney to draft); people may want a statement in the contract that the person we are dealing with has authority to act for a principal (corporation, entity, etc.).  A title company may require or insistence of the parties.  THIS SHOULD BE DONE PREFERABLY BY AN ATTORNEY.
    • -EX; John W. Thompson represents that he has the authority to commit the Maximinus Group, L.C. to sell this property and that he will produce documentation of his authority that is adaquate to satify the title company upon request at any time prior closing.
    • -Disclose that a party is a licensed broker or salesperson
  9. What are some typical uses for Special Provisions based on Property?
    • -confirm fixtures that are to go to buyer; even though the contract mentions all fixtures go to the buyer, disputed items should be listed (NOT PERSONAL PROPERTY)
    • EX: The birdbath in the backyard is agreed to be a fixture and a part of the real estate conveyed to buyer at closing.
    • -fixture loans (for removable fixtures; pools, alarms, etc.); Two choices; seller can pay off or buyer can take over payments; consult with lender; lender may not allow buyer to take over; fixture loan lender may not allow buyer to take over due to lower interest rate from seller; if all goes well have an attorney write up special provisions
  10. Does personal property being sold to the buyer be listed in special provisions?
    -NO; skip or use the TREC Non-Realty Items Addenda; personal property is a separate agreement; unless you check with the lender
  11. Consult the _____ before using a Non-Realty Items Addenda.
    lender
  12. What are some typical uses for Special Provisions based on Financing?
    • -locks for points and interest; lock interest rate; mention, but agreement will be on separate paper
    • -EX: The buyer agrees to sign a lock agreement with the lender to lock the interest rate and the number of cash or discount points within ____ hours of the effective date of this contract.
    • -describe unusual financing; ARMs, or other special financing details; lifetime cap on interest rate, interest rate adjustment period length, interest rate period cap, index, margin
    • -EX: The buyer will provide a 3-2-1 buydown on the buyer's loan to 7% the first year, 8% the second year, and 9% the third year.
    • -EX: The third party financing the buyer plans to use for loan is a Bond Money program loan or Specify the loan type; FNMA Plan 584.
  13. What are some typical uses for Special Provisions based on Title?
    • -the buyer or lender may wish to delete the survey exception to the title policy. 
    • -This modification should involve a LAWYER
    • -Title companies may delete the survey exception if they get: an old survey and an affidavit from the seller that no changes have taken place since the last survey.
    • -state how deletion is done.
    • -EX: Deletion of survey exception must meet title company requirements.
  14. What are some typical uses for Special Provisions based on Property Condition?
    • -buyer may request a walk-through before closing to confirm that all fixtures stated in the contract are still there.
    • -EX: On the day of closing ____ hours prior to closing, the buyer may walk through the property and inspect it. The seller and any licensee have the right to accompany the buyer during the walk through.
    • -EX: walk though and change of locks.
    • -Property clean-up; "seller shall thoroughly clean the property, etc. shampoo carpet, etc.
    • -Furnish Inspection copies; seller and agent may request copies of the inspection of property to see what all is going on.
    • -EX: Buyer shall deliver copies of all inspections buyer makes of the property to the Seller within seven days after they are done.
  15. What are some typical uses for Special Provisions based on Closing?
    • -early preparation of a HUD-1
    • -????
  16. What are some typical uses for Special Provisions based on Possession?
    • -Purchase of vacancy insurance leases (Analysis- parties may specify non-TREC lease)
    • -state who pays for vacancy insurance
    • -Use promulgated leases or attorney approved leases.
  17. What are some typical uses for Special Provisions based on Closing Costs?
    • -extra closing costs that are not listed in paragraph 12.
    • EX: The buyer shall pay lender's inspection fee of $75, a processing fee of $200, lender required messenger fees of $65, and lender FAX fees at .50 per page.
    • -Limits on closing costs (caps)
    • -EX: The buyer shall pay no more than $350 for an appraisal.
  18. What are some typical uses for Special Provisions based on Termination of Offer?
    • -Cooperating salesperson from buyer puts an expiration date on offers to listing agent; so listing agent will respond faster.
    • -EX: This offer to buy expires at blank time on blank date unless the offer is signed with no changes and an ORIGINAL CONTRACT has been delivered to the cooperating BROKER or SALESPERSON at blank address by that time.
  19. What are some typical uses for Special Provisions based on Property Must Appraise For Sale Price?
    • -In a large down payment situation, the lender's appraisal is not very accurate.  A full-fledged appraisal could show a very different figure. A special provision might allow the buyer to back out if the property did not appraise for the lender's appraiser's figure. 
    • -Use an attorney 
    • -Cash; hire an appraiser during the option period
  20. What are some final mechanics of Special Provisions?
    • -At the end of a special provision or all of them add: End of special provisions or end of all special provisions
    • -Each special
  21. At the end of a special provision or all of them, what do you put?
    end of special provision or end of all special provisions
  22. Each Special provision, should be _____ by all parties.
    initials
  23. Make copies of contract and multiple originals such as _____ or so should be made.
    four.

Card Set Information

Author:
Blue2xa88
ID:
321240
Filename:
RE Contracts Ch. 11 Special Provisions
Updated:
2016-06-20 23:42:08
Tags:
special provisions contracts
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Description:
special provisions
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