History of the American Indian

The Original American Democracy

Joseph S. Hutchinson

History of the American Indian

HIST223

American Military University

Dr. Janet Rozick

March 24, 2014

The writing of contracts is a form of practicing law and therefore should be handled by lawyers; yet real estate agents everyday write contracts for the buying and selling of real property. These actions are allowed because real estate agents use preprinted forms that have been certified by lawyers to produce real estate contracts such as a traditional purchase contracts, installment contracts, option contracts, and lease with option to buy contracts. Each type of contract has a specific purpose or benefit to the parties that are negotiating with it. As a general rule all contracts must contain at a bare minimum: the names of the parties in the contract, adequately describes the land or property to be sold, provides the essential terms of the agreement, and be signed by the party against whom the contract is to be enforced or by an agent authorized by that party (Bergman).

A couple wants to buy a home and another couple wants to sell their home so they come together, do some negotiating, shack hands and then exchange money for deed and the property transactions is complete; right. In a perfect world that would undoubtedly make sense I have it, you want it now let us exchange to make a deal. However in the real world where fraud exists each party needs to be given time to ensure that everything is in order. From that idea the sales contract was born. The sales contract and the time allotted within the contract were built out of the necessity of ensuring that the buyer has time to secure money and ensure that the seller is the true rightful sole owner who can legally sell the property they are trying to sell. Essentially, it is a legal promise from both sides that they will do their required part to ensure the transaction happens in the required time. A properly prepared contract gives neither party a way out but rather keeps them to task.

To make an adequate purchase contract first the main four points above are addressed, additionally, this preprinted form that an agent will use will also have provisions. There are four main provisions that must be addressed as well; provisions for the buyers earnest money, provisions for the buyers offer to purchase, provisions for the acceptance of the offer by the seller, and provisions for the payment of the brokerage commission (Jacobus, 2010). Additionally, within this contract many provisions can be added to or taken away depending on the parties wishes and the complexity of the sale they include; deed and condition of the title, prorating taxes and insurance, termite inspection, loan conditions, property damage, and time limits (Jacobus, 2010). Depending on the provision and expectation of the parties will depend on who benefits from these provisions or if they become an impassible sticking point at the time of the offer. Basically, both parties review each other’s provisions or restrictions to the transaction and if both sides agree then the transaction moves forward however if they should not agree the contract is void unless the sticking points can be negotiated and mutually agreed upon.

Much like the purchase contract the installment contract caries, much of the same provisions and form but also has some elements similar to the warranty deed and mortgage rolled into it.  In the installment contract, the most important aspect is that the seller does not deliver the deed at the time of the transaction like he would in a sales contract because the buyer is paying installments typically monthly like rent until they are able to find financing for the entire purchase. However, the buyer is given full use, rights, obligations, and privileges as if they own the property already (Jacobus, 2010). This is because they have an equitable title share in the property. In other words at a time determined in the contract the buyer will secure enough funding to properly buy the property in a traditional sales contract manner. The installment contract has received a lot of scrutiny in the past as it was used to create fraudulent deals for buys that typically resulted in them losing money and the property. However, through the recent passage of laws these practices have been put to rest. Now the buyer is given many of the same rights as a traditional purchase contract and mortgage. They are allowed: a specified period to rectify any past due installments prior to the seller taking action; are foreclosed on just like a traditional mortgage; the deed is typically placed in escrow until the buyer secures the funding; taxes and insurance payments are figured into the monthly installments to account for the buyers obligations; and as with all property sales contracts they are filled in public record (Jacobus, 2010). If used this contract should be definitely be drafted with the assistance of an attorney.