Have you heard the saying, “Let me get that in writing?” This comes from contracts, real estate, and any sort of legal issues. Practicing law is not just limited to conducting litigation. The term “practicing law” includes giving out legal advice and counsel rendering a service that requires legal knowledge.

Necessity of Legal Assistance

Unauthorized Practice of Law

Courts have held that is it was the unauthorized practice of law for persons other than a licensed attorney to conduct or represent parties at a closing of a real estate transaction or the refinancing of a mortgage. Simply filling in the blanks on the standardized forms drafted by attorneys, if doing so requires legal judgement, can constitute the unauthorized practice of law and drafting franchise agreements, offering circulars and licensing agreements, and executing registration certificates is practicing.

To be on the safe side, consult with an attorney before signing any real estate contracts. In the end, your attorney is the one with a legal license to review documents and advise clients of the legal consequences of their actions. No amount of personal experience can substitute for a licensed attorney’s advice.

Contracts- A Basic Overview

When it comes to contracts, there is always an “offer” and an “acceptance”. The offer is a manifestation of willingness to enter into a bargain, so that the other party is justified in believing that their assent to that bargain is invited and that it will be concluded with assent. Acceptance can be communicated by rendering performance or notifying the offeror of the acceptance. In every contract, there must be consideration. Consideration may consist of performance or a promise. In real estate contracts, consideration may arise out of simple duties to exercise good faith. If each party has not assumed some legal obligation to the other, the contract may want for consideration.

Oral Contracts

Oral contracts can be legally binding. Without a written record of agreement, it may be difficult to prevail in a dispute revolving around “It is my word against his/hers.” To prevent the difficulties arising from oral contracts, it is wise to have a written record of all agreements.

There are certain instances that an oral contract will not be upheld due to high risk of fraud:

• Contracts in consideration of marriage
• Contracts which cannot be performed within one year
• Contracts for the transfer of an interest in land
• Contracts by the executor of a will to pay a debt of the estate with their own money
• Contracts for the sale of goods above a certain value
• Contracts in which one party becomes a surety (acts as guarantor) for another party’s debt or other obligation

The purpose of the Statute of Frauds is to reduce contracts to a certainty, in order to avoid perjury and fraud. In a contract for the sale of real property, a signed written instrument describing the tract of land and its location is required.

Real Estate Contracts: A Walk Through

There are different types of brokers when it comes to real estate. Seller’s Brokers owes duties to the seller which has fiduciary duties. This is more than just a duty of good faith; they must do something for the seller even if it is against their best interest. They also owe dues to the buyer. With no agreement, the duty is to be trustworthy, honest, and disclose known defects that are visible. With a dual agency agreement, some duty more than good faith and less than fiduciary.

Types of Listing Agreements

Exclusive rights to sell

• The tightest agreement, no matter who ends up finding a buyer for the property the seller’s broker gets the commission. The broker will get paid once the property is sold. This type of agreement must have a termination date.



• After the agreement expires, if the property sells to a person that the broker has put on a list if the seller withdraws the property or if there is an offer to purchase at the listing price, or any price acceptable to the seller and the buyer is ready, willing and able to close the deal.

Open Listing

• Anyone who procures the buyer gets the commission. This can list the property with 100 different brokers. The sellers can terminate at any time. In a standard listing agreement, paragraph 7 allows the broker to become dual agent and represent a buyer.

Agreements

The buyer generally can assign the right to purchase to someone else. If you do not want this, put it in the contract that the buyer has no right to assign his rights under the contract.

The best way to identify the property:

• Tax assessor’s parcel number
• Parcel or subdivision map
• Metes and bounds

It is possible to find the commonly known street address, but this is not the best way to do it.

During the agreement of sale, the first provision of any commercial real estate contract is the agreement of sale.

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