Practice Tip. Many lenders provide estimates of closing costs as part of the financing process. These estimates may not contain certain items that must be listed (e.g., Broker fees or inspection fees), and generally should not be used in place of a separate estimate of closing costs drawn up by the agent unless the Broker/agent is absolutely sure that the estimates provided by the lender are comprehensive and accurate.
Practice Tip. If the “No business relationship” checkbox has been checked, the Broker and Licensee should not write their information in that Business Relationship Block. Answer the questions in the flow charts below to determine which box to check on the Agreement.
Practice Tip. When filling out the Business Relationship Blocks, keep in mind that only the legal name and address of Pennsylvania licensed real estate offices should appear in these blocks. Don’t use office nicknames or home addresses if they are not approved by and registered with the State Real Estate Commission.
Examples of Practice Tip in a sentence
Best Practice Tip: Obtain either the lowest feasible bid or the best possible offer from as many prospective bidders/offerors as reasonably possible.
However, a transfer or assignment shall not be made which materially adversely affects the contractual rights of a person having a contract with that political subdivision.History: 1986, Act 196, Imd.
Practice Tip for Customers Seek to have the negotiated exceptions to the dollar cap apply also to any exclusion of consequential or other types of damages.
Practice Tip for Vendors Be careful using “consent not to be unreasonably withheld” in your standard assignment clause.
Practice Tip for Vendors Since the transfer of nonexclusive license rights can sometimes lead to significant unintended consequences (such as transfer to a competitor), consider a broad “deemed transfer” clause that would require your permission prior to any transfer by change of control of the customer by stock sale, merger, or the like.
More Definitions of Practice Tip
Practice Tip. The line for Seller assist can be used to state a specific dollar amount or a percentage of the sales price. Whichever is used, be sure both parties understand how that number relates to any counteroffers that are made. For example, a Buyer may need to increase a dollar amount of assistance to reflect a higher negotiated sales price; a Seller who can only afford to contribute a certain dollar amount might need to reduce a percentage of the assist if the purchase price increases. Practice Tip: Regardless of the intent of the parties, most lenders have a maximum amount or percentage of Seller assist they permit. It is VERY important to know what the maximum amount or percentage is, so the parties do not inadvertently cause a problem in the transaction by including a Seller assist that exceeds that maximum. Remember that when the Agreement is finalized, there may be other areas (particularly in relation to Inspection Contingency) where the Seller might agree to provide a credit for some reason. Be sure to check with the lender to see if these credits might be counted against the total amount of a Seller assist. The last sentence makes it clear that the Seller is only required to pay up to the lender’s maximum amount or percentage. Be careful of the following example: Original Offer: $100,000 Purchase Price, with a $6,000 Seller assist; the lender’s maximum allowed Seller assist is 6%. This is not a problem because $6,000 is not greater than 6% of the Purchase Price. Counteroffer: The Purchase Price is reduced to $97,000 Purchase Price, with a $6,000 Seller assist; the lender’s maximum allowed Seller assist is 6%. This is a problem because $6,000 represents 6.2% (greater than 6% of the Purchase Price). At closing, the Buyer is likely limited to $5,820 by lender policy.
Practice Tip. As flood maps can change, it may be more or less difficult to obtain flood insurance. Buyer may be required to carry flood insurance at Buyer’s expense, which may need to be ordered 14 days or more prior to Settlement Date.
Practice Tip. The Buyer can do as many (or as few) additional inspections under this item as they would like, but all must be completed and acted upon by the end of the end of the Contingency Period. For this reason, the home inspection should be done as soon as possible in case any issues arise that indicate other inspections should be completed (e.g., the home inspector recommends a mold inspection). If additional inspections will take more time, the parties must agree on this change in writing.
Practice Tip. To some degree, there is an implied insurance contingency in the mortgage contingency because a Buyer who cannot get insurance is not likely to get a loan. This implied protection does not exist in a cash sale (there would be no mortgage contingency) nor where a policy is more expensive than the Buyer would like, but not so expensive that it affects the Buyer’s ability to be approved for a mortgage. This contingency is also helpful if the Buyer has unusual insurance needs not directly linked to financing (e.g., insurance coverage for jewelry or art). Practice Tip: Common examples of items that might be included in a Written Corrective Proposal include repairs to be performed by the Seller, a reduction in price, or the Seller agreeing to pay some portion of a first year premium cost. This inspection includes flood insurance. In 2012 the United States Congress implemented changes to the National Flood Insurance Program (NFIP), which changed the major parts of the NFIP including flood insurance rates, flood hazard mapping, grants, and the management of floodplains. Changes will be phased in over several years, and may be subject to additional Federal changes. The language in the Agreement is intended to inform prospective buyers that due to the removal of Federal subsidies, the Property may be subject to higher premiums for flood insurance, or that the Property may be located in a newly-mapped floodplain requiring the purchase of flood insurance. The Buyer should be advised to comply with the current mandates of the NFIP and not rely on assurances from the Seller regarding the need for, or the cost of, flood insurance.
Practice Tip. In setting any dates in the Agreement that might rely on the results of negotiations under this Paragraph (settlement date, for example), be sure to permit enough time to give the Buyer and Seller the opportunity to fully exercise their rights under this Paragraph. Scheduling settlement prior to the end of the time period stated in this contingency does not extend settlement and could result in one or both parties forfeiting their rights. If the Buyer fails to respond or terminate within the given time, the Buyer will accept the Property and agree to the Release in Paragraph 28 of this Agreement. Note: Ongoing negotiations or discussions do not automatically extend the Negotiation Period. Any agreement to extend the Negotiation Period must be in writing. Subparagraph (C): On-Lot Sewage Disposal System If an Inspection Report indicates that the on-lot sewage disposal system needs to be expanded or replaced, the Inspection Contingency in Paragraph 13(B) is not used. In this instance, the Seller may obtain a detailed corrective proposal (including who is responsible for any repairs) and submit that proposal to the Buyer. The Buyer will then elect one of three options:
Practice Tip. If your Buyer is running out of time in the stated period, attempt to negotiate an extension. Remember that any extension must be signed within the Contingency Period to be effective; if there is no negotiated extension during this time, the Buyer may have waived certain rights once the original Contingency Period expires. To negotiate different timelines for an inspection, the parties can use the Change in Terms Addendum (PAR Form CTA) to change a specific date in limited circumstances. Subparagraph (B): The Inspection Contingency The Inspection Contingency provides the Buyer with three choices after completing their Inspections:
Practice Tip. The default language in this paragraph requires that the inspector be licensed as a “wood destroying pests pesticide applicator.” In short, the requirement is that the inspector be someone who is licensed by the state to treat for active infestation. This requirement was included because there is no state-mandated certification for inspectors. While most inspection companies provide some sort of inspection training, there are not consistent standards from company to company; using the state certification as a starting point allows for a certain amount of consistency. If the parties agree that another inspector is permitted, best practice would be to amend this paragraph accordingly.