Contracts in Real Estate Transactions

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Chapter 6

• Contracts in Real Estate Transactions

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Contracts

• An exchange of promises between parties,
  conditioned on certain events and enforceable by
  law.
• Necessary Elements of a Contract
• Offer and acceptance
• Consideration
• Capacity of parties
• Lawful purpose
• Writing requirement (Statute of Frauds)

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Contract Issues

• Breach of Contract
• One party does not fulfill contract
• Specific Performance
• If seller breach
• Sell property
• Pay buyer fees
• If buyer breach
• Earnest money

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Contract Contingencies

• Specified conditions in a contract that relieve
  the parties of their promises to perform
• financing contingency
• title contingency
• inspection and repair contingency

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Common Real Estate Contracts

• Real Estate Sales Contract
• Option-to-Buy Contract
• Contract for Deed

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Real Estate Sales Contract

• Bilateral buyer seller
• See website for Standard Texas Contract

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Option-to-Buy Contract

• Option fee
• Property held for period
• Seller must sell at agreed price if buyer decides
  to purchase
• Common developer tool

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Contract for Deed

• A.K.A. Installment Sales Contract
• Stretches payments over time
• Buyer has possession
• Seller keeps title until paid in full
• Recent Texas changes (2001)
• 60-day cure
• Buyers equity

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End Chapter 6