The seller dies after an offer to purchase their property has been accepted. The seller’s grandchild inherits the real estate. What happens to the sale?
Audio Lesson
Duration: 2:41
Question & Answer
Review the question and all answer choices
The offer is voidable.
A is incorrect because the contract is not voidable. Voidable implies that one party has the option to cancel the contract, which isn't the case here. Death doesn't create grounds for voiding a real estate contract.
The grandchild is compelled to sell under the terms of the accepted offer.
The offer is terminate
C is incorrect because the contract is not terminated automatically by death. Real estate contracts are designed to survive such events, ensuring continuity in transactions.
The seller’s grandchild inherits the real estate. What happens to the sale? a. The offer is voidable. b. The grandchild is compelled to sell under the terms of the accepted offer. c. The offer is terminated. d. The grandchild may choose whether or not to honor the sale. 210 Unlocking the DRE Salesperson and Broker Exam, Sixth Edition
D is incorrect because the grandchild doesn't have a choice in this matter. As heir, they inherit both the property and the contractual obligations, including the duty to honor the sale.
Why is this correct?
B is correct because an accepted offer creates a binding contract that survives the death of either party. The grandchild, as heir, inherits not just the property but also the contractual obligations associated with it, including the obligation to sell under the terms of the accepted offer.
Deep Analysis
AI-powered in-depth explanation of this concept
This question tests understanding of contract law in real estate transactions, specifically the principle that real estate contracts are binding upon acceptance and survive the death of either party. This concept is crucial because real estate transactions often take time to close, during which various circumstances might change. The core concept here is that a binding contract creates obligations that are enforceable by law and don't simply disappear when a party dies. When analyzing this question, we must recognize that once an offer is accepted, it becomes a binding contract with specific terms. The death of a party doesn't automatically terminate or void this contract. Instead, the deceased party's estate or heirs step into their shoes and must fulfill the contractual obligations. This question challenges students who might assume that death automatically voids contracts, which is a common misconception. Understanding this principle connects to broader knowledge about contract formation, enforceability, and the unique nature of real estate as an asset that can be inherited.
Knowledge Background
Essential context and foundational knowledge
The principle that real estate contracts survive the death of a party is rooted in contract law and property law. This rule exists because real estate transactions involve significant commitments and considerations, and allowing contracts to continue ensures fairness and prevents parties from escaping their obligations. Most jurisdictions follow the Uniform Vendor and Purchaser Risk Act, which generally provides that when a party to a real estate contract dies before closing, the contract is binding on their estate or heirs. This distinguishes real estate contracts from some other types of contracts that may include specific provisions about death or disability.
Think of a real estate contract like a relay race baton. When the seller dies, it's not like the race stops - instead, the grandchild picks up the baton and continues the race to the finish line (closing).
When encountering questions about death during real estate transactions, visualize the relay race baton being passed to the heir, who must continue the transaction.
Look for questions involving death during real estate transactions. Remember: contracts don't die with parties - they survive and bind heirs to the original terms.
Real World Application
How this concept applies in actual real estate practice
Imagine a scenario where a seller accepts an offer on their home, then unexpectedly passes away three weeks later before closing. The buyer is concerned about the sale proceeding. As the listing agent, you would explain to the buyer that the contract remains binding, and the seller's heir (the grandchild) must honor the terms of the agreement. You would coordinate with the grandchild's probate attorney to ensure a smooth closing process, demonstrating how real estate professionals navigate these situations regularly.
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