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Intermediate1 hour14 terms

Real Estate Contract Key Terms: Bilateral Focus

This curated collection offers key terms that might be helpful when exploring bilateral contracts in real estate investment. It focuses on commonly referenced concepts and legal terminology you may encounter during property transactions. Use this as a quick reference to clarify essential contractual elements and obligations.

Term Collection

1

Earnest Money

Earnest money is a deposit made by a buyer to a seller, held in escrow, demonstrating the buyer's serious intent to purchase a property and serving as security against buyer default.

Intermediate13-14 min
2

Consideration

Consideration in real estate refers to the value exchanged between parties in a contract, essential for its legal enforceability. It can be money, property, services, or a promise to perform an action, ensuring mutual commitment to the agreement.

Intermediate12-13 min
3

Inspection Contingency

An inspection contingency is a clause in a real estate purchase agreement that allows the buyer to conduct a professional home inspection and, based on the findings, negotiate repairs, request credits, or withdraw from the contract without losing their earnest money deposit.

Intermediate5 min
4

Due Diligence

Due diligence is the critical process of investigating and verifying all material facts about a property and its financials before a real estate acquisition, aiming to identify risks and ensure an informed investment decision.

Intermediate14-15 min
5

Appraisal Contingency

An appraisal contingency is a clause in a real estate purchase agreement that allows the buyer to back out of the deal or renegotiate if the property's appraised value is less than the agreed-upon purchase price. It protects buyers from overpaying and ensures lenders do not finance more than a property is worth.

Intermediate5 min
6

Addendum

An addendum is a document added to an existing real estate contract, such as a purchase agreement, to introduce new terms or clarify existing ones without altering the original document's language.

Intermediate2 min
7

Acceptance

Acceptance in real estate is the unconditional agreement by a buyer or seller to the exact terms of an offer, forming a legally binding contract for a property transaction.

Beginner2-3 min
8

Appraisal

An appraisal is an unbiased, professional opinion of a property's market value, conducted by a licensed appraiser, primarily used for lending, buying, and selling decisions.

Intermediate14-15 min
9

Bilateral Contract

A bilateral contract is a legally binding agreement where two parties exchange mutual promises to perform specific actions, making it the most common type of contract in real estate transactions.

Beginner5-6 min
10

Contingency Clause

A contingency clause in a real estate contract is a condition that must be met for the agreement to become legally binding, providing an escape route if specified terms are not satisfied.

Intermediate13-14 min
11

Purchase Agreement

A Purchase Agreement is a legally binding contract that outlines the terms and conditions of a real estate transaction, formalizing the buyer's offer and the seller's acceptance.

Intermediate12-13 min
12

Breach of Contract

A breach of contract occurs when one party fails to fulfill their obligations as specified in a legally binding agreement, leading to potential legal and financial consequences for all involved parties.

Intermediate13-15 min
13

Real Estate Investing

Real estate investing is the practice of purchasing, owning, managing, and/or selling properties for profit, leveraging assets to generate income, capital appreciation, and tax benefits.

Intermediate12-13 min
14

Remedies for Breach of Contract

Legal actions available to a non-breaching party in a real estate transaction to seek compensation or enforcement when another party fails to fulfill their contractual obligations.

Intermediate5 min

Common Questions