Real Estate - Binders
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A few closely related topics & pages From Bob Parrish CPA PC:
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Engagement Status Letter From Bob Parrish
CPA PCYou have not engaged Bob Parrish CPA PC, Bob Parrish CPA, pro1040, Consulting on line, any related parties, or the ISP to perform any services for you or offer you advice. This entire site is for educational or informational purposes only. You are not to use the forms, concepts, strategies, or knowledge without assistance from a professional. The author, the corporation, the ISP, Bob Parrish CPA, Bob Parrish CPA, P.C. or other parties related to those or this site do not guarantee or warrantee in any manner the suitability, usefulness, accuracy, timeliness, or results of any portions of this site, nor the links contained in this site which link to other areas. At times, information is taken from other sources and is believed to be accurate, but no verification or confirmation is performed. Furthermore, if any federal or state law invalidates a portion of this disclaimer, the other portions still apply. In addition, any allegations or actions are restricted to arbitration only and must be arbitrated by the Better Business Bureau in Sarasota Florida. Reading of these pages constitutes complete acceptance and agreement with all disclaimer provisions on all pages of this site. ....... Thursday, February 22, 2007 02:28 AM
Learning
Objectives (What You Asked) From Bob Parrish CPA PCYOUR QUESTION(S)
Objective one
What You Will Need From
Bob Parrish CPA PC
Plain English Analysis What it does, Why it works - The Answer, Alternatives From
Bob Parrish CPA PC|
Plain English |
| What it Does | Why or How it works | Alternatives |
| Cost v. Benefits Analysis |
YOUR ANSWERS
Please Reply To The Longboat Key Office
August
9, 1999
Document Transmitted Via:
WHEN IS A BINDER A CONTRACT?
ANSWER: WHEN IT CONTAINS ESSENTIAL TERMS
A recent New York case points out when a broker can collect a commission even though a formal contract is not signed. In the case of Neahaus Realty Inc. v. Pension Trust, the court decided that a signed binder was a sufficient "meeting of the minds" upon which to award a broker a commission.
The defendant Schwimmer had signed two brokerage listing agreements, one for the sale of real property and another for the sale of a business. Plaintiff was listed as the broker, and a commission of 10% was to be payable on the sale of the business and 5% on the sale of the real estate. The agreements contained the standard language requiring the commission to be paid "if the property is sold, conveyed or otherwise transferred."
The plaintiff broker produced a buyer who was willing to purchase the property and the business at the asking prices of $750,000.00 and $1,750,000.00 respectively. A binder was then signed by the defendant seller and the buyer. The critical facts are that the binder contained the names of the parties, the street address of the property and the personally involved, recital of the good faith deposit, the price, the method of payment and the type of conveyance. Interestingly, the binder was specifically made subject to a formal contract to be prepared by the buyer's and sellers attorneys. Absent from the agreement was any reference to closing date and when the purchase price would be paid.
The parties' attorneys prepared and negotiated contracts and scheduled a formal contract signing, however, the seller refused to sign the agreement and subsequently signed another listing agreement with the plaintiff broker increasing the asking price and reducing plaintiff's commission to $100,000. The same purchaser agreed to the increased prices and came to a second contract signing at which lightening struck a second time. The defendant seller demanded a further price increase and the purchasers backed off. The plaintiff broker sued for its commission. One difficulty presented by the case was that the broker's agreement required payment of the commission when the property was sold, in effect, "as, if and when title passed," unless, of course, the seller defaults on the contract. In this case, the court had to decide whether the seller had defaulted on a contract, and whether there was actually a contract between the parties.
The court held that the binder agreement, which contained all the essential terms, was in fact a contract, the breach of which by the seller, caused a commission to be owed to the plaintiff broker. The court specifically held that because the binder agreement called for a more formal contract did not render the binder insufficient. The court found that the broker had produced a buyer who was ready, willing and able to purchase and that the defendant seller acted in bad faith.
Although it would not be good practice to rely on a binder to receive a commission, it is interesting to note that a binder agreement signed by both parties containing all essential terms can form the basis of a brokers commission if the seller breaches the agreement and acts in bad faith.
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Other
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Reserved
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Technical Analysis & Citations What It does, Why
it works - From Bob Parrish CPA PC|
Technical Analysis |
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Commentary
Start of Revenue Procedures Section
Start of Private Letter Rulings
Tax
Killers
From Bob Parrish CPA PC
This is about Activity Based Taxplanning - maximizing deductions, minimizing cash outlay and maximizing the amount of cash retained and the net worth. Activity Based Taxplanning (ABT) is a methodology developed by Bob Parrish CPA, that assists people with the tax issues by focusing on the activity (or actions - events) that are being undertaken or contemplated (or have already taken place). The, research is compiled from the myriad of sources to help you complete the activity with the least tax cost, while maintaining compliance the tax laws, other laws and regulations and place yourself in a position to protect your objectives.
Tax is a subject that many view in order to cut costs. Taxes are a cost just as any other cost. It happens this cost is somewhat intangible and is defined by legislation without a tangible item to view and control. The money is spent and the control of the expenditure is more appropriately administered by someone trained in the law.
Cost
Killers
From Bob Parrish CPA PC (Management Info Sys, Cost Acctg, Activity Based
Costing)
This is about Activity Based Costing - methods to cut costs, management accounting, management information systems, decision support systems - in general about being a manager.
Preparing for your CPA, attorney, or preparing to start
your own What to gather - From Bob Parrish CPA PC
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How to Prepare For the CPA or Legal Counsel - Save the Professional Time - Save Your Money |
| Exit Interview | |
| From Customer Records | |
| From Your Other Business, or Financial Records | |
| What to do | |
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From Your Other Business, or Financial Records
From Corporation Records or Organization Records (meetings, etc.)
Start of Preparing For You CPA Section
Forms - checklists, time-line to do, etc. Assistance - What
To Do - From Bob Parrish CPA PC |
Forms, Checklists, Calendars, Etc. |
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Forms - Checklists - Etc. |
GENERAL SETUP & STARTUP
PRINT FORMS AND DOCUMENTS NEEDED
PRESENTATION STANDARDS
FROM CLIENT OR BUSINESS RECORDS
CONTRACTS, BILLS OF SALE, AGREEMENTS, ETC.
LIST OF DOCUMENTS NEEDED
ORGANIZER
ENTRANCE INTERVIEW
EXIT INTERVIEW
OBTAIN THE ORGANIZER AND BE CERTAIN ALL INFORMATION IS AVAILABLE
GATHER AND SORT THE INFORMATION
OBTAIN THE WORKPAPER TITLE SHEETS
OBTAIN THE PRESENTATION TITLE SHEETS
OPEN ALL STANDARD DOCUMENTS
OVERVIEW THE ENTRANCE INTERVIEW FORM
OVERVIEW THE LIST OF INFORMATION AND CLIENT OR BUSINESS RECORDS NEEDED
START THE REQUIRED COMPUTER PROGRAMS
OBTAIN THE CHECKLISTS IF NEEDED AND WORK ON THE JOB BY EACH TYPE OF ACTIVITY OR EVENT
PRINT ALL THE REQUIRED DOCUMENTS OR MAKE COPIES AS NEEDED
DETERMINE THE CORRECT PRESENTATION STANDARD TO USE
ENGAGEMENT LETTER AND DISCLAIMER
PRESENTATION IN GENERAL
WHAT THE ENGAGEMENT IS LIMITED TO
WHAT SERVICES WERE PERFORMED
HOW THIS HELPS & BENEFITS
4 WAY TEST APPLICATION
Is it the TRUTH
Is it FAIR
Will it build GOODWILL and BETTER FRIENDSHIPS
Will it be BENEFICIAL to all
BEFORE FINALIZING THE WORK PROCESS CONSIDER THE FOLLOWING
Compliance
Paying Bills or other events
The professional should perform functions the client does not have time for
The professional should perform necessary functions the client staff does not have training for
Reduce Costs
Reduce Risks
Setting Goals or objectives
Setting methods for monitoring
Setting dates, methods & procedures for follow-up
Setting guidelines for defining when variances from the guideline warrant policy or procedure changes
Identify the policies or procedures that need to be changed to accomplish the goal or objective
OBTAIN THE STANDARD WORKPAPER FORMS NEEDED
LIST OF THE STANDARD FORMS AND W/P NEEDED
OBTAIN THE DOCUMENTS FOR THIS JOB
PLACE BLANK FORMS IN THE CORRECT SEQUENCE
GENERAL & FOR ALL JOBS
Instructions for finalizing and completion - for example instructions for the mailing of forms to the IRS
Actions Checklist
Report Cover Letter
Required Documents and attachments
FINAL OVERVIEW BEFORE THE JOBS IS ENDED & CLOSED
LOOK AT THE ORIGINAL QUESTION - has it been answered, were more questions added?
THE ANSWER - limit the answer to a short paragraph of about 7 sentences. Did this solve the issue? The ANSWER is not considered the SOLUTION
THE SOLUTION - understand the objective or goal and restate it. Were the goals met? What might prevent obtaining the goals. Do the benefits outweigh the costs? Reduce Costs? Reduce Risks? Setting Goals or objectives:
Setting methods for monitoring
Setting dates, methods & procedures for follow-up
Setting guidelines for defining when variances from the guideline warrant policy or procedure changes
Identify the policies or procedures that need to be changed to accomplish the goal or objective
ACTIONS - checklist, calendar, columnar presentation showing separate columns for Client, CPA, Broker, Bookkeeper, Lawyer, Insurance Agent, etc.
COST v. BENEFITS ANALYSIS
PROPOSAL
FACTS DISCOVERED & USED
COMPUTATIONS & REPORTS
TECHNICAL ANALYSIS WITH CITATIONS AND AUTHORITY
FORMS - agreements, contracts, trusts, tax forms, financial reports, management information reports, policies or procedures
REQUIRED ATTACHMENTS
Overview - look at the steps required and the steps performed. Are there unusual items? Are there exceptions or adverse results of the procedures performed? Find resolutions for all unusual or adverse items.
Compliance - has compliance "substantially" been met. That is no "material" adverse results?
Math Check
Proof and spell check
Theory & overview by someone not performing the procedures
Close the case and archive it.
Spreadsheets & Computations From Bob
Parrish CPA PC Spreadsheet #1
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Contracts, Trusts, etc. From Bob Parrish CPA PC Agreement #1
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Reports
Required Tips from Bob Parrish CPA PC Report #1
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Checklists for Deployment From Bob Parrish CPA PC Checklist #1
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Checklist for Monitoring From Bob Parrish CPA PC Checklist #1
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Financial Accounting: Bookkeeping & Financials Tips
From
Bob Parrish CPA PC |
Financial Accounting |
Financial Statement Presentation
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Back to Start of Financial Accounting: Bookkeeping & Financials
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Bookkeeping Methods - Cash, Accrual and Other
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How the Business Entity Affects the Recording
Sole Proprietor
Corporation - C & S
Partnerships - General, Limited, Limited Liability Company, Registered Limited Liability Partnership or Company
Trusts
Tax Exempt
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Compliance - what is required for protection, defense, etc.
Tips From Bob Parrish CPA PC Compliance Checklist
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Alerts
& Dangers - Risks, Asset Protection, IRS Defense Tips From Bob
Parrish CPA PC |
Alerts - Dangers - Risks - Asset Protection - Defenses (IRS, Etc.) |
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