Real Estate Law

Things To Know When
Buying Or Selling A Home

The New York Real Estate Law stipulates that a real estate contract is a legally binding agreement between a buyer and seller concerning title to property.

Since contracts play such an important role in the real estate marketplace, real estate investors must have a thorough understanding of the fundamentals of contract law.

Here's a page about how to choose a New York Real Estate Attorney.

And here you will find information about a Real Estate Power Of Attorney.

Essential Elements of a Real Estate Law Contract

In Writing - To be enforceable, real estate contracts must be in writing and contain all the essential elements to be valid. Short-term leases are often exceptions to this requirement.

Competent Parties - A party to a contract should be of legal age when entering into the contract. A minor entering into a contract has the choice of either withdrawing or enforcing the contract.

A party is incompetent if they are declared insane by a court. Those who have entered into contracts while “temporarily mentally incompetent” due to drugs or alcohol may also be considered incompetent.

Mututal Assent - Mutual assent is also known as a “meeting of the minds.” This is an essential element requiring an offer and an acceptance.

Legal Consideration - All parties to a contract must offer consideration. Consideration is something of value and may take the form of money, real estate, personal property, or services.

Lawful Object - A contract must have a legal purpose to be enforceable.

Property Description - A contract must identify the property being sold. While a street address is sufficient, the legal description should be used to clearly identify the property.

Price - The purchase/sales price must be stated. The parties may also use some reasonably ascertainable figure such as the appraised value as of a specified date.

Signatures - The contract must be signed by all parties. In the case of corporations or partnerships, an authorized person may sign on behalf of the entity.

The Steps to a Valid and Enforceable Real Estate Law Contract

Offer - An offeror making an offer prepares a written contract, signs it, and then sends it to the offeree. The offer may terminate upon either an acceptance of the offer, a counteroffer, the expiration of a time limit, the withdrawl of the offer before acceptance, the offeree’s failure to accept in the manner specified in the offer, or the death and insanity of either party.

Counteroffer - A “conditional” or “qualified” acceptance. The offeree signs the original offer, makes changes, and sends it back to the offeror. Counter offers must be in writing. Counteroffers are terminated under the same conditions as an offer.

Acceptance - In acceptance, an offeree agrees to a contract and its terms without any changes. An acceptance must be in writing and signed by the offeree.

Communication - After acceptance, the final step is to communicate the acceptance to the offeror together with a copy of the accepted offer.

Earnest Money - A cash deposit paid by the buyer as a show of good faith to fulfill the terms of the contract. Earnest money is not required for a valid contract.

When a buyer and seller execute a contract, the buyer secures an equitable interest in the property. The seller, on the other hand, secures a claim on the earnest money during the executory stage of the contract.

If you have a question about real estate law, contact me here.

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