Contracts

1
Contracts

• Dr. Jim Burton
• Marketing Real Estate
• Richards College of Business

2
Overview

• Elements of a Contract
• Real Estate Sales Contract
• Escrow
• Option to Buy
• Breach of Contract

3
Elements of a Contract

• Offer Acceptance
• Consideration
• Capacity of the Parties
• Lawful Purpose
• Writing Requirement (Statute of Frauds)
• Specific Performance

4
Real Estate Sales Contract

• Date, Price Earnest Money
• Legal Description
• Title Warranty, if any
• Financing
• Property Destruction
• Real Estate Commission
• Personal Property/Inspection

5
Escrow

• Escrow - earnest money warranty deed is held by
  third party.
• Mortgage Escrow - escrow accounts with mortgage
  lender for real estate taxes insurance premium.

6
Option to Buy

• Lease-Purchase
• Option to Buy
• Right of First Refusal
• Option Fees

7
Breach of Contract

• Sue for Specific Performance
• Seek payment for damages
• Retain Earnest Money
• Liquidated Damages

8
Review Contract, p.118-119.
9
Buyer Provides

• Cash to Close
• Mortgage Loan
• Property Inspection Report
• Insurance Policy

10
Seller Provides

• Marketable Title
• Deed to Buyer
• Existing Mortgage Payoff
• Pays Real Estate Commission