876 IAC 2-8-7 - Real estate contracts
Authority: IC 25-34.1-2-5
Affected: IC 25-34.1-5
Sec. 7.
(a) The
competency and instructional level for subdivisions (1) through (6) and (10) is
Level 2. The competency and instructional level for subdivisions (7) through
(9) is Level 1. The following are concepts of basic contract law:
(1) The following basic contract terms and
classifications:
(A) Definition of a
contract.
(B)
Express/implied.
(C)
Bilateral/unilateral.
(D)
Executed/executory.
(E) Valid
(enforceable)/void (unenforceable) /voidable.
(2) The following essential elements of a
contract:
(A) The following requirements for
mutual assent (offer and acceptance):
(i) The
offer.
(ii) Acceptance.
(iii) Counteroffers.
(iv) Termination of offers.
(B) Consideration.
(C) Capacity of the parties.
(D) Lawful objective.
(3) The following requirements for reality of
consent:
(A) Mistake.
(B) Fraud and misrepresentation.
(C) Duress.
(D) Undue influence.
(4) Contract law and auction sales as
follows:
(A) Basic procedures.
(B) "With reserve" versus "without
reserve".
(5) Statute of
frauds (applied to real estate contracts) as follows:
(A) Contracts to sell or convey any interest
in real property.
(B) Leases of
real property exceeding three (3) years in duration.
(6) The following discharge of contracts:
(A) Agreement of the parties.
(B) Full performance.
(C) Impossibility of performance.
(D) Operation of law.
(7) Assignment of contracts.
(8) General rules for interpretation of
contracts.
(9) The following
contract remedies:
(A) Money
damages.
(B) Specific
performance.
(C)
Recision.
(10) Other
considerations as follows:
(A) The following
authority to sign:
(i) Competency.
(ii) Age.
(iii) Power of attorney.
(iv) Need for signature of all
parties.
(B) Notary
public.
(C) Changing a
contract.
(D) "Time is of the
essence".
(E) Abbreviations in
contracts.
(F) Blanks in
contracts.
(G) Who may write
contracts.
(b) The competency and instructional level
for subdivisions (1) through (6) and (8) is Level 3. The competency and
instructional level for subdivision (7) is Level 2. The following are concepts
of listing contracts and practices:
(1)
Definition and purpose of listing contracts.
(2) Broker's entitlement to a commission as
follows:
(A) The following requisites for
establishing claim to a commission:
(i)
Broker must be licensed.
(ii)
Broker must have a valid employment (listing) contract.
(B) Ready, willing, and able buyer
rule.
(C) Procuring cause of sale
rule.
(3) The following
basic types of listing contracts (characteristics of each):
(A) Open.
(B) Exclusive agency.
(C) Exclusive right to sell.
(D) Protection agreement.
(4) Multiple listing service
arrangements. (Use sample pages from local MLS book for illustration of how the
MLS lists properties.)
(5) The
following listing contract provisions (Introduce listing agreement used on
state examination.):
(A) Property
description.
(B) Listing price and
terms of sale.
(C) Broker's
duties.
(D) Brokerage fee
(including computations) as follows:
(i)
Percentage of sale price (commission).
(ii) Flat fee.
(iii) Net listing.
(iv) Splitting the fee.
(E) Duration of listing.
(F) "Override" (or "extender")
clause.
(6) Property
data sheet as follows:
(A) Purpose and
use.
(B) Listing agent's
responsibilities.
(C) Determining
square footage.
(D) Seller's
disclosure of defects.
(7) Termination of listing
contracts.
(8) Practice preparation
of listing contracts and property data sheets. (Students should be afforded
supervised practice in completing listing contracts and property data sheets.
Note the consequences of inadequate or improper preparation of listing
contracts and property data sheets.)
(c) The competency and instructional level
for subdivision (1) is Level 3. The competency and instructional level for
subdivision (2) is Level 1. The competency and instructional level for
subdivision (3) is Level 2. The following are concepts of sales contracts and
practices:
(1) The offer to purchase.
(Student should be afforded supervised practice in completing an offer to
purchase as used on the state examination, including special provisions and
modifications by counteroffer, for a variety of fact situations.)
(A) The following major contract provisions:
(i) Description of the property (including
personal property to be included in the sale).
(ii) Sale price and payment terms.
(iii) Earnest money, and possible forfeiture
thereof as follows:
(AA) Forms of earnest
money and disclosure thereof.
(BB)
Post dated checks.
(CC) Importance
of explaining to buyer and seller the handling of an earnest money
deposit.
(iv) Type of
conveyance and quality of title.
(v) Closing and possession dates.
(vi) Closing expenses and
prorations.
(vii) Condition of
utilities.
(viii) Condition of
property in general.
(ix) Risk of
loss.
(x) Wood destroying
insects.
(xi) Contingency
provisions as follows:
(AA) Buyer
financing.
(BB) Sale of buyer's
present home.
(xii)
Signature and dates.
(B)
Offer, acceptance, and delivery (review of legal requirements as applied to
this type of contract) as follows:
(i)
Handling by telephone.
(ii)
Handling by mail.
(iii) Withdrawal
of offer.
(C) Submitting
the following offers to seller:
(i) Other
competitive offer.
(ii) Conditional
"back up" offer.
(D)
Handling contract modification.
(E)
Furnishing copies of offers and contracts to buyer and seller.
(F) Specific performance.
(G) Disclosure by agent that he represents
the buyer, the seller, or both.
(2) Installment land contracts (Use sample
for illustration.) as follows:
(A) Definition
and purpose.
(B) Typical
provisions.
(C) Advantages and
disadvantages (from viewpoint of both buyer and seller).
(D) Preparation.
(E) Default and foreclosure.
(F) Voluntary information.
(G) Recording.
(3) The following options to purchase real
estate (Use sample form for illustration.):
(A) Definition and purpose.
(B) Rights of parties.
(C) Requirements of options.
(D) Right of first refusal. (Distinguish from
"option".)
Notes
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