1. CHAPTER 6 CONTRACTS AND TITLE CLOSING This chapter introduces students to the types and contents of contracts that are common in real estate sales transactions and discusses the title closing process.

2. Necessary elements of a contract: Offer and acceptance Consideration Capacity of parties Lawful purpose Writing requirement Statute of frauds Partial performance

3. Real estate sales contracts: Groundwork for negotiating a sales contract Negotiation stage Sales contract (Figure 11.1) Description of property and fixtures Purchase price Title Escrow Provisions for earnest money Property destruction Miscellaneous provisions Broker's commission Conclusion to the contract

4. Performance and breach of contract: Breach Specific performance Remedies for breach of contract

5. Option-to-buy contracts: A contract that gives one party the right, but not an obligation, to purchase a property within a specified time horizon at a specified price.

6. Contract for Deed (Land Contract or Agreement for Deed) Installment payments over time Seller retains title until the agreed amount is paid. If payment is missed, buyer may lose property; however, many states say buyer is entitled to a refund of their equity (but not interest paid).

7. Title Closings: Buyer’s responsibilities Financing the purchase Obtaining a title opinion Having the property surveyed Obtaining property insurance Inspecting the property Other responsibilities

8. Title Closings: con’t Seller’s responsibilities Preparing the deed Removing encumbrances Paying the seller’s loan Obtaining a termite bond Other responsibilities

9. Title Closings: con’t Cost at Closing Buyer’s costs Seller’s costs Pro-ration of homeowner’s costs Understanding the settlement statement HUD Uniform Settlement Statement (Fig. 15.1) Example Parties present at closing Events at closing Escrow closing