Real Estate Contract Basics

What is a contract?

A contract is a formal, legally binding document containing the terms of an agreement between two or more parties.

A contract must contain:

• Competent parties

For a contract to be enforceable, the parties in the contract must be competent. If one of the parties is insane, intoxicated, or underage, the contract may be rendered void or voidable.

• Offer and acceptance

There is no contract without offer and acceptance of the offer. All terms of the contract must be agreed upon by all parties. After the terms of the contract are agreed, the acceptance must be communicated to bring the contract into being.

A real estate contract must be in writing and signed by all parties bound by the agreement for it to be enforceable.

• Legality

The purpose of the contract must be lawful.

• Consideration

Consideration is the obligations each party makes to the other necessary to make the contract enforceable. For example, a buyer has the obligation to pay for what the buyer agrees to buy. The seller has the obligation to sell to the buyer.

• Once a real estate contract is accepted....
• Real Estate Contract - Addendums
• Assignment in Real Estate Investment