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© OnCourse Learning Chapter 8 : Real Estate Sales Contracts.

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Presentation on theme: "© OnCourse Learning Chapter 8 : Real Estate Sales Contracts."— Presentation transcript:

1 © OnCourse Learning Chapter 8 : Real Estate Sales Contracts

2  to allow time to ascertain that the parties can each perform the terms of the agreement which are written and signed promises to perform. THE PURPOSE SALES CONTRACT © OnCourse Learning

3  Shows buyer’s “good faith”  No law governs the amount  Earnest money is not consideration  Not required for valid contract EARNEST MONEY DEPOSIT © OnCourse Learning

4  Provision for buyer’s earnest money deposit  Buyer’s offer to purchase  Acceptance of the offer by seller  Provisions for payment of broker fees  Instructions to closing agent  Possession PURCHASE CONTRACTS © OnCourse Learning

5  Closing Agent  Prorating  Inspections  Loan Conditions  Property damage  Buyer default  Time limits © OnCourse Learning CONTRACT TERMS

6  This is a legal term which means the time limits set by the contract must be faithfully observed or the contract is voidable by the non-defaulting party.  Due to the legal nature of this term, it should not be used by the real estate agent! “TIME IS OF THE ESSENCE” © OnCourse Learning

7  Signatures  Acceptance  Notification  Federal Clauses  Preprinted Clauses  Riders  Negotiation © OnCourse Learning ADDITIONAL CONTRACT TERMS

8 LEAD-BASED PAINT IN HOUSING Approximately three-quarters of the nation's housing built before 1978 contains some lead- based paint. Federal law requires that before a buyer or tenant becomes obligated under a contract for sale or lease the seller or landlord must disclose the possibility of lead-based paint and lead-based paint hazards and provide available reports along with the pamphlet “Protect Your Family From Lead in Your Home.” © OnCourse Learning

9  A short purchase contract used to secure a real estate transaction until a more formal contract can be signed. © OnCourse Learning BINDER

10  Used to express the mutual intention to buy, sell, lease, develop, or invest  Outlines agreement of terms  No obligation is created LETTER OF INTENT © OnCourse Learning

11  If the preprinted form requires extensive cross-outs, changes, and riders, the contract should be drafted by a lawyer.  A real estate license is not a license to practice law. © OnCourse Learning PRACTICING LAW

12  Installment Contracts  Option Contracts  Lease with Option to Buy  Right of First Refusal  Exchange Agreements OTHER TYPES OF CONTRACTS © OnCourse Learning

13 Deed and Installment Contract Compared DeedInstallment Contract BuyerSeller Deed BuyerSeller BuyerSeller BuyerSeller BuyerSeller Deed © OnCourse Learning

14 Possible Trading Combinations © OnCourse Learning

15  The job of the real estate agent is to determine the business details of the transaction and not to practice law!  A real estate license is not a license to practice law. © OnCourse Learning

16  Binder  Default  Earnest money deposit  Equitable title  Installment contract  Lease-option  Qualified intermediary  Right of first refusal  Tax-deferred exchange  “Time is of the essence” Key Terms © OnCourse Learning

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