Various examination Problem Topics, specifically Purchase Contract Provisions, have been identified by the North Carolina Real Estate Commission (NCREC) where previous applicant testable knowledge was relatively weak. Food for thought; if a critical content topic has been identified as an examination Problem Topic by the NCREC – should applicants expect to see the content on the NC Real Estate Broker License Examination? Yes!!!
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ANY preprinted offer to purchase form may be used for consumer use that meets the basic provisions / elements enumerated in Commission Rule A.0112. The basic preprinted contract provisions include;
- Terms & Definitions. Major terms of the contract.
- Names. ALL parties to the contract must be listed by their current individual legal name.
- Property. A legal description must be provided to create an e
- Purchase price. The amount to be paid for the property.
- Earnest money. Although not essential for a valid contract – it is unusual not to have earnest money.
- Escrow agent. The escrow agent name and company identified to hold the trust money.
- Effective date. Date contract was formed; after signature – upon communication.
- Due diligence. An optional period of time established for buyer to determine if they will consummate transaction.
- Settlement date. Closing is still identified as recording of the deed. Settlement is the gathering of the documents & funds necessary to complete transaction.
- Special Assessments. Charges that may become a lien for something other than taxes or HOA dues.
- Fixtures. An item of personal property that has been converted to real property by being permanently affixed to the realty.
- Personal property. List all (chattel) personal property to convey with the real estate.
- Buyer’s due diligence process. Recommended list of activities that should be performed during due diligence period.
- Buyer representations. NON-conditions & disclosures (representations) of the contract.
- Seller representations. Duties of the seller.
- Prorations & adjustments. Proration of listed items are established.
- Home warranty. If the seller is providing a home warranty.
- Condition of property/risk of loss. Ensures buyer receives property in same or better condition.
- Delay in settlement. Establishes 14 day grace period the non-delaying party agrees to.
- Possession. Possession of property to be delivered at closing (after recordation of deed).
- Other provisions & conditions. Identify / list addenda to the contract.
- Concluding provisions. Assignments, tax-deferred exchange, parties, survival, etc.