1. Contracts in Real Estate Transactions
Chapter 6
Contracts in Real Estate Transactions

2. 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)

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

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

5. Common Real Estate Contracts
Real Estate Sales Contract
Option-to-Buy Contract
Contract for Deed

6. Real Estate Sales Contract
Bilateral – buyer & seller
See website for Standard Texas Contract

7. Option-to-Buy Contract
Option fee
Property “held” for period
Seller must sell at agreed price if buyer decides to purchase
Common developer tool

8. 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
Buyer’s equity

9. End Chapter 6