Common Mistakes

Unit #1 Definition and Elements of Contracts

Objectives:

Upon completion of this section, the student should be able to:

Define a contract; describe the elements necessary for a valid contract.

Introduction to Contracts:

Contracts are an essential part of the transfer of real estate. It is important that you, as the real estate professional, are familiar with these contracts, know how to use them, and have the ability to explain the terms contained within these forms to your clients.

These forms aid in the development of a legally binding contract between the parties and express the terms, conditions, timeline, and promises of the seller and the purchaser.

Should an issue or dispute ever arise between the parties to a contract, these forms and their content will be of the utmost importance in arbitration or in a court of law.

In this course, we will be referring to the contract between the buyer and the seller for the purchase of real property as a Purchase and Sale Agreement (PSA).

TIP: Familiarize yourself with all of the common forms used in real estate contracts. Practice filling out blank forms and when possible, get your managing broker to review these forms. This will eliminate some of the mistakes that you might make when writing a contract for a client.