Acceptance refers to the act of agreeing to accept an offer, thereby forming a binding contract when it comes to real estate transactions. It is a critical phase where a seller agrees to the buyer's offer under specified terms and conditions, leading to the formation of a sales contract.
An addendum, also known as a rider, is a supplemental document added to a primary contract to include additional terms or clarify existing conditions without rewriting the entire original document.
An adult is an individual who has reached the age of majority, which is defined as either 18 or 21 years old, depending on the state. This status grants the legal capacity to enter into binding contracts, including real estate transactions.
AFFIRM in real estate refers to the act of confirming, ratifying or verifying an agreement or contract. This action solidifies the terms and obligates all the parties involved.
Anticipatory breach, also known as anticipatory repudiation, occurs when one party to a contract declares that they have no intention of fulfilling their obligations defined in the contract. This declaration relieves the other parties from any contractual obligations and may allow them to seek remedies.
Arbitration involves settling disputes through a neutral third party agreed upon by each side in the dispute. It is commonly used in real estate to resolve conflicts outside the public court system.
Assignment is the method by which a right or contract is transferred from one person to another, typically involving leases, mortgages, and deeds of trust. It enables the assignee to sustain the interest in the property originally held by the assignor.
In the context of real estate, to attest means to witness or certify by observation and signature that an event, action, or document is accurate or true. This often involves verification by a third party, such as notarizing a document or witnessing the signing of a contract.
A Backup Contract is a pre-arranged agreement to purchase real estate that takes effect if a primary contract is not completed, providing a secondary buyer an opportunity under predefined conditions.
A contract under which each party to the agreement promises to perform a certain act or duty. Bilateral contracts are binding promises where both parties require performance—a cooperative and mutual engagement. It contrasts with unilateral contracts, which involve only one party making a promise or taking action.
A Buy-Back Agreement is a contractual provision where the seller commits to repurchasing the property at a predetermined price upon the occurrence of a stipulated event within a specific timeframe.
A Cancellation Clause is a provision within a contract that grants the right to terminate the agreed-upon obligations upon the occurrence of specified conditions or events.
A key element for any valid contract in real estate, ensuring that individuals entering into legal agreements are legally capable and have the mental capacity to understand their actions.
Condition(s) provision(s) in a contract that specify certain events or circumstances that can alter or negate the terms of the contract. Common examples include events such as destruction of property or inability to secure financing.
A contingency clause specifies conditions that must be met for a real estate contract to become binding, providing a safeguard for both buyers and sellers.
A contingent offer in real estate is a bid or offer that is proposed with specific conditions which must be met for the sale to proceed. These conditions, called contingencies, protect the buyer and ensure their interests are safeguarded before finalizing the purchase.
A Contract for Purchase or Sale, also known as an Agreement of Sale, is a comprehensive legal document between a buyer and a seller that outlines the terms and conditions of a real estate transaction.
A Contract of Sale, also known as an Agreement of Sale, is a legal document that outlines the terms and conditions under which a sale of property will be completed between a seller and a buyer.
The term coterminous in real estate refers to two or more arrangements, such as leases or agreements, that have the same period or ending date.
A counteroffer involves the rejection of an initial offer to buy or sell a property, accompanied by a substitute offer with different terms. It is a critical component in real estate negotiations, encompassing factors like price, financing arrangements, closing costs, and more.
In real estate, default refers to the failure to fulfill an obligation or promise, or to perform specified actions as agreed upon in a contract. This term is frequently used in scenarios involving mortgages or leases where the borrower or tenant fails to meet the terms agreed upon.
Duress in real estate refers to a situation where an individual is compelled to enter into a contract or agreement due to a threat or coercion, making the contract voidable.
An Earnest Money Contract is a crucial document in the real estate acquisition process, outlining the intention of a buyer to purchase a property and of a seller to sell it. It typically includes details about the amount of earnest money paid, the conditions under which the money will be applied or forfeited, and other terms of the sale.
An escalation clause in real estate is a contract provision allowing for an adjustment in the price based on external factors, often used in competitive bidding situations.
An escape clause is a provision in a contract that allows one or more parties to cancel all or part of the contract if certain events or situations do or do not happen.
Escrow is an arrangement in which a third party holds funds or documents on behalf of the primary parties involved in a transaction, pending the fulfillment of specified conditions.
An employment contract that grants the broker the right to collect a commission if the property is sold by anyone, including the owner, during the term of the agreement.
An extension is an agreement between two or more parties to extend the time period specified in a contract. Extensions are common in real estate transactions and are used to ensure that all parties have adequate time to fulfill their obligations.
A clause or addendum to an agreement of sale that stipulates conditions for financing the property that must be met for the buyer to be obligated to close the sale.
A Fixed-Price Lease-Purchase Option is a contractual agreement where a tenant has the option to purchase the leased property at a predetermined price after or during the lease term.
A guarantor is a third party to a lease, mortgage, or other legal instrument who guarantees performance under the contract. Guarantors play a critical role in helping individuals or businesses secure financing or lease agreements by providing an additional layer of security for the lender or landlord.
In real estate, a guaranty involves an assurance provided by one party to compel another party's performance under a contract, often involving a co-signer to ensure obligations are met.
A Hold Harmless Clause in a contract is a provision by which one party agrees to protect another party from claims, lawsuits, or any legal liabilities arising from a specific situation or activity.
Indemnification refers to a contractual obligation typically found in insurance agreements where one party agrees to compensate the other for any potential loss or damage incurred. This concept is widely used to manage risk, particularly in real estate transactions.
Ingress and egress refer to the right to enter (ingress) and exit (egress) a property. These terms are critical in real estate contracts as they ensure individuals have legal access to properties, facilitating movements in and out particularly for landlocked premises.
In the realm of real estate, 'irrevocable' refers to a commitment or agreement that cannot be changed, withdrawn, or undone once it is established. This term is commonly used in the context of legal and financial documents where permanence is crucial.
Legal age refers to the official standard of maturity upon which an individual is considered legally responsible for their actions. In the context of real estate, contracts involving minors are typically voidable.
A plan offered by some real estate brokers that allows buyers or sellers to contract for less than the full array of brokerage services at reduced commission rates.
In real estate, a minor is an individual who has not yet reached the age of majority, which varies by state but is typically between 18 and 21 years old. Contracts involving minors, such as those for the sale or use of real estate, are subject to special legal considerations.
A nondisturbance clause in a real estate contract ensures that a tenant's lease will continue even if the property owner faces foreclosure, or that surface development will not be impeded by subsurface mineral rights.
An obligee is the person or entity in whose favor an obligation is entered into and who has the right to demand the fulfillment of that obligation from the obligor.
Offer and acceptance is a fundamental concept in contract law that requires a clear and unequivocal offer by one party and an unambiguous acceptance by the other party, forming a legally binding agreement once acceptance is communicated.
An option to purchase is a contract granting the holder the right, but not the obligation, to buy a property at a specified price within a set timeframe, subject to pre-defined conditions.
A Primary Lease is an agreement between a property owner (landlord) and a tenant that may be partially or wholly subleased to another tenant.
A Property Condition Addendum or Clause is a section within a real estate contract detailing the state of the property being sold and setting the terms under which repairs and maintenance should be completed.
A Purchase and Sale Agreement (PSA) is a legally binding contract that outlines the terms and conditions related to the purchase of real estate assets. It is used primarily to detail the obligations and rights of both the buyer and the seller before the actual transfer of property ownership.
A purchase option is a contractual right granted to a party (typically a tenant) that gives them the opportunity, but not the obligation, to buy an asset or property at a specified price within a set period.
A recapture clause is a provision in a contract that allows the party granting an interest (such as a lease) to take it back under specific conditions. Common in commercial leases, this clause provides a landlord the option to retake leased premises if the tenant's performance—usually measured by sales or revenue—falls below a defined threshold.
Renegotiate refers to the process of formally revising the terms of an existing contract between parties, typically to address changes in circumstances, mutual agreement, or to achieve more favorable conditions. This often involves adjustments in areas such as payment terms, interest rates, deadlines, and scope of work.
A rental agreement, often referred to as a lease, is a legal contract between a landlord and a tenant that outlines the terms under which the tenant agrees to rent a property owned by the landlord.
Rescind refers to the withdrawal or cancellation of an offer, contract, or agreement before it is fully executed. This term is notably applicable in various legal and real estate contexts, offering a means of nullifying transactions under specific conditions.
A short form is a concise document, often no more than two pages, that references another, more detailed document. It is usually recorded at the county courthouse to avoid handling a longer, more cumbersome document.
A straight lease, also known as a flat lease, is a type of rental agreement where the tenant pays a fixed rental amount through the duration of the lease term, regardless of changes in property expenses or other variables.
Subrogation in real estate refers to the substitution of one entity for another concerning a claim or right. The substituting entity acquires the legal rights and claims of the original party.
A sunset clause is a provision in a contract that sets a termination date for the agreement unless certain conditions are met, providing a clear timeframe for action or decision-making.
Termination in real estate entails the conclusion of contractual obligations such as leases, loans, or options either by performance or by breach.
The scheduled end date of a lease, mortgage, or option, indicating the conclusion of the agreed terms and obligations.
Conditions and arrangements specified in a contract, determining the obligations, rights, and conditions particular to an agreement between parties involved in a real estate transaction.
An unsubordinated land lease is a type of lease agreement where the land remains unencumbered by any mortgage attributable to the property improvements.
Valuable consideration refers to a benefit, interest, or value provided by one party to another, in exchange for something of value, forming the basis of a contractual obligation enforceable by law.
In the context of real estate, a `void` agreement means that it has no legal force or effect and is unenforceable from the outset. A void contract does not legally bind any of the parties involved and is treated as if it was never entered into.
A waiver is the voluntary renunciation, abandonment, or surrender of a claim, right, or privilege, often formalized through a written statement. In real estate, waivers are commonly used to relinquish specific rights or stipulations within contracts or agreements.
A warranty is a promise contained in a contract, typically in real estate, that guarantees certain conditions or performances with regards to a property, often provided by the seller or builder.
