test certification sheet notarized - thelfire.com

1 Dear virginia Licensee, The attached material covers the Getting the Contract to Settlement course approved by the Commonwealth of virginia for one hour mandated of continuing education for the correspondence course. After you read through it, complete the test, fill out the answer sheet and test certificate sheet and return to us. We will then grade the test and if you received a 70% or better overall score, we will notify the virginia Real Estate Board that you have satisfied the education requirements for license renewal. If you do not get 70%, we will notify you of the need to re-test. The booklet contains: 1. a review of contract law 2. contract quiz 3. answer/test certification sheet If you have any questions as you review the materials, you may request to speak to an instructor by calling 703-560-9044 (Northern virginia ), 757-473-1500 (Hampton Roads), 804-346-2234 (Richmond) or 800-543-3365 (Roanoke). Return to us ONLY the answer sheet and test certification sheet along with your notarized affidavit with your payment of $ by check, Visa, Master Card or Discover.

2 We will send your name and your virginia license number to the Real Estate Board via email at least semi-monthly. Please do not wait until the last minute to return the information to us. We will also send you a certificate stating that you have completed the required hours. Be sure to retain the certificate because the Real Estate Board could request a certified copy. If you have any questions, please call one of the numbers listed above. Good luck in your studies! Sincerely, Jill Malloy Northern virginia Training Director 2 GETTING THE CONTRACT TO SETTLEMENT (Using the Regional Contract and Addenda) Very often, getting a contract on a listing is easy. It s getting to settlement that is the difficult part. Why is that? Sometimes, it s due to high emotions of buyers and sellers. Other times, it is because the agents do not fully understand the contract or because they fail to fully educate their clients upfront. Unfortunately, it is sometimes due to poor agent etiquette.

3 Sometimes, Murphy s Law just happens. The agent has control over most of these variables, and when Murphy s Law happens, if the agent has done his/her job, what goes wrong is easier to repair and it doesn t appear to be so terrible. There are 6 steps to a successful settlement. They are: 1. Knowing the Sales Contract and the Forms 2. Educating the Clients Fully Upfront so there aren t Surprises 3. Anticipating Potential Problems 4. Completing All Addenda at the Time of Contract Ratification 5. Abiding by All Time Periods 6. Being Professional and Courteous at All Times Knowing the Sales Contract and the Forms The process begins with agents knowing the contract and the forms. This is critical to keeping clients on track and out of trouble. Following, is a review of some key points of the more commonly used forms and addenda. There is a definite difference between ratification and contingencies. Ratification occurs when all terms of the contract have been agreed upon by all parties to the contract.

4 A ratified contract can have twenty contingencies; however, it is still ratified if all parties to the contract have agreed to all twenty contingencies and all other terms in writing. The greater the number of contingencies, the weaker the contract is because each contingency gives one or both parties an opportunity to void the contract without being in default. Usually, sellers warrant that certain systems and equipment will be in normal working order on the day of possession or settlement (paragraph three of the Regional Sales Contract). If so, the agent must know which systems these are and what warranting them means. In the Regional Sales Contract, the seller warrants that the existing appliances, heating, cooling, plumbing, electrical systems and equipment, and smoke and heat detectors (as required), will be in normal working order as of the possession date. The seller agrees to deliver the property in substantially the same condition as on the 3 Contract Date and broom clean with all trash and debris removed.

5 The seller is also warranting that the well water will contain no more than the acceptable level of coliform bacteria and that the septic system appears to be functioning satisfactorily, and if known by public records, was installed pursuant to a valid health department permit. In addition, sellers warrant that all dwelling(s) and/or garage(s)) within the Property (excluding fences or shrubs not abutting garage(s) will be free of visible evidence of active termites or other wood-destroying insects and free from visible structural insect damage. The Regional Sales Contract also states that sellers will repair any items found to be in violation by their homeowners association or condominium association. As long as the items identified in the preceding paragraph are preserved in the sales contract, the seller is responsible for them. Both agents must understand that the federal government looks upon certain charges relating to a real estate transaction as being unearned.

6 The most common example of this is lenders fees. If buyers are obtaining VA or FHA financing, those buyers are prohibited by law from paying lender s fees. The Regional Sales Contract states that the sellers pay those fees. If the purchasers request that the sellers pay a closing cost credit, that closing cost credit is first applied to the lenders fees and the remainder is applied to the purchasers closing costs. If the purchasers do not request any closing cost credit, the sellers pay the lenders fees. It is important that the listing agent note this on the seller s net sheet when this scenario occurs. Very often, different companies use different addenda or older versions of the same addenda used by the listing company. It is crucial that the listing agent is aware of this and knows what the particular addendum received with the contract says. With some addenda, sellers must respond in order for something to go into effect; with others, if the sellers don t respond, the same thing goes into effect.

7 The NVAR Contingencies and Clauses Addendum states that, in the cases of a home inspection contingency or radon contingency, the failure of either party to respond to a counter-offer within the specified time period results in the contract becoming void. The agent who does not know this can be the cause of their clients contract becoming void. This is why it is so crucial that the listing agent review each form before advising sellers to sign and/or initial. In certain instances, buyers must either rent their current home or settle on it once it is sold in order to obtain the loan on the new property. In some contracts, this could fall under financing, in which case, if the property isn t rented or doesn t settle, the purchasers do not get the loan and the contract is voided with the purchasers being under no further obligation. In the case of the Regional Sales Contract, the contract is not contingent upon the successful lease or settlement of a property unless it is specified in a written contingency.

8 The virginia Property Owners Association Act states that sellers provide to purchasers an Association Disclosure Packet that is current as of the date specified on the Association Disclosure Packet. The purchasers then have an opportunity to cancel the contract: 1) within 3 Days after the date of Contract Acceptance, if on or before the 4 date of Contract Acceptance, the purchasers receive the Association Disclosure Packet or notice that the Association Disclosure Packet is not available; 2) within 3 Days after hand delivered receipt of the Association Disclosure Packet or notice that the Association Disclosure Packet is not available; or 3)within 6 Days after the postmark date if the Association Disclosure Packet or notice that the Association Disclosure Packet is not available is mailed to the purchasers. The purchasers may also void the contract at any time prior to settlement if they have not been notified that the Association Disclosure Packet will not be available and the Association Disclosure Packet is not delivered to them (the purchasers).

9 If purchasers choose to void the contract, they need only give notice to the sellers that they are voiding the contract. However, this notice must be hand delivered or mailed, return receipt requested, within the cancellation period to the sellers. This notice voiding the sales contract cannot be faxed. The purchasers also have the opportunity to request assurance from the association that the information submitted in the Association Disclosure Packet remains materially unchanged, or if there have been material changes, a statement specifying such changes. If there are material adverse changes, the purchasers have no opportunity, at this point, to cancel the contract. With the virginia Condominium Act, purchasers may also void the contract as in the virginia Property Owners Association Act, with notice to the sellers by hand delivery or mail (not fax), return receipt requested, within the cancellation period. They may also request assurance from the association that the information submitted in the Resale Certificate remains materially unchanged.

10 However, if there are one or more adverse material changes, the purchasers do have the opportunity to cancel the contract. The prudent listing agent will order Property Owners Association or Condominium documents as soon as possible, even before the listing is entered into the computer so that he/she can deliver them to the buyers at the time of contract ratification or shortly thereafter. The listing agent should take responsibility for obtaining these documents and delivering them safely to the buyers only at the address stated on the virginia Jurisdictional Addendum. All documents should be current and not re-cycled. If there are time periods with which to comply in the contract, both agents must know when the clock begins to tick and what could potentially happen if any time periods are not met. In certain cases, one party can void the contract if a time period is disregarded. Educating the Clients Fully Upfront so there Will Not be Surprises Often, problems occur between contract and settlement because the clients have not been fully educated upfront by the agent.