876 IAC 2-12-6 - Real estate contracts
Authority: IC 25-34.1-2-5
Affected: IC 25-34.1-5
Sec. 6.
(a) The
competency and instructional level for subdivisions (1) through (6) and (10) is
Level 4. The competency and instructional level for subdivisions (7) through
(8) is Level 1. The competency and instructional level for subdivision (9) is
Level 3. 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) Essential elements of a contract with the
following requirements for mutual assent (offer and acceptance):
(A) The offer.
(B) Acceptance.
(C) Counteroffers.
(D) Termination of offers.
(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) The
following statute of frauds (applied to real estate contracts):
(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) The
following other considerations:
(A) Authority
to sign as follows:
(i) Competency.
(ii) Age.
(iii) Power of attorney.
(iv) Need for signatures 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 (8) is Level 4. The following are concepts of
listing contracts and practices:
(1)
Definition and purpose of listing contracts.
(2) Broker's entitlement to a commission
including the following:
(A) Requisites for
establishing claim to a commission as follows:
(i) Broker must be licensed.
(ii) Broker must have a valid employment
(listing) contract.
(iii) Broker
must (with certain exceptions) qualify under either:
(AA) the "ready, willing, and able" buyer
rule; or
(BB) the "procuring cause
of sale" rule.
(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
arrangement. (Use sample pages from local MLS book for illustration of how the
MLS lists properties.)
(5) Listing
contract provisions including the following (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
the following (including computations):
(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 including the following:
(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
extensive supervised practice in completing form 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 4. The competency and instructional level for
subdivision (2) is Level 2. The competency and instructional level for
subdivision (3) is Level 3. The following are concepts of sales contracts and
practices:
(1) The offer to purchase
including the following (Students should be afforded extensive 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) Major contract
provisions as follows:
(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.
(BB) Post-dated
checks.
(CC) Importance of
explaining to buyer and seller the handling of an earnest 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 as follows (review of legal requirements as applied to
this type of contract):
(i) Handling by
telephone.
(ii) Handling by
mail.
(iii) Withdrawal of
offer.
(C) Submitting
offers to sellers; conditional "back-up" offers.
(D) Handling contract modifications and
counteroffers.
(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 including the
following (Use sample form for illustration.):
(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 termination.
(G) Recording.
(3) Options to purchase real estate including
the following (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".)
(d) The competency and instructional level
for subdivisions (1) through (6) is Level 3. The following are concepts of
property management:
(1) Property
description.
(2) Contract
period.
(3) Agent's, property
manager's fee (including computations).
(4) Agent's authority (powers).
(5) Agent's responsibilities (specific
duties).
(6) Handling of security
deposits and rents. (Note the handling of security deposits and rents should be
covered in depth when covering the real estate commission's "Trust Account
Guidelines".)
Notes
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