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INFORMATION THAT WILL BE ADDED
TO THE 4th EDITION A purchaser entering into a contract sale will want to take certain precautions. First a title search should be conducted on the property and a contract buyer’s title insurance policy obtained. Some contract purchasers are surprised to find out too late that the seller does not have good title and may not have title at all. Second a deed should be made out from the seller to the buyer and placed into escrow. Instructions to the escrow agent would be to deliver the deed after the last payment is made. Another very important provision should be to set up a collection account at a bank. The contract purchaser’s payments would be made to the collection account. The bank would then pay the payments on any existing liens of the seller out of the collection account and pass the rest on to the contract purchaser. As part of the collection account, a tax escrow would be set up. This will ensure the purchaser that the portion of the payment that is to cover the real estate taxes is being held for taxes. It also ensures the seller that the money will be there when the tax bill comes due. As mentioned previously, we want to be sure to record the contract. Recording the contract gives constructive notice of our interest in the property. This will prevent the seller from using the property to secure new loans. --------------- new question #29 29. When a real estate licensee is handling the contract, which of the following contracts would not be subject to the Quinlan-Tyson decision? A. contract between the buyer and seller B. a lease between the lessor and lessee C. a listing or buyer representation agreement D. a buyers waiver of a contingency answer: c --------------- 30. When is the purchase price determined in an option? a. when the option is entered into b. when the option is exercised c. within 30 days of exercising the option d. within 30 days of the option expiring answer: a
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