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Learn about the essential elements of real estate transactions, including contracts, deeds, and lease agreements. Understand the types of deeds and the recording process. Explore the different types of lease agreements for commercial properties.
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4 Real Estate Transactions A real estate sale can include: Listing agreement Buyer’s representation agreement Financing instruments Escrow agreement Inspections Title insurance, and more
Elements of a valid contract • Parties with legal capacity • Offer made and accepted • Lawful object • Consideration • In writing, if required by Statute of Frauds
Other contract facts Counterofferrejects original offer Statute of limitationssets time for enforcement Contract can be dischargedby Performance Rescission Release Novation Reformation Assignment Breach (but other party may sue for specific performance)
Requirements for Valid Deed Must be in writing and describe the parties and the property Grantor must be legally capable of executing the deed and there must be a granting clause Deed must be signed by grantor and delivered to and accepted by grantee
Types of Deeds • Grant deed • Quitclaim deed • Warranty deed • Bargain and sale deed • Trust deed • Reconveyance deed • Sheriff’s deed • Tax deed
Recording • Acknowledgment of grantor’s signature entitles document to recording • Recordingof document serves as notice to the world of the transfer of title • Recorded deed places grantee in the chain of title to the described property
Lease Agreements Lessor (landlord) is property owner Lessee (tenant) is party acquiring right of use of the property Fair housing laws protect tenant’s rights
Lease Agreements Commercial property may be subject to • Gross lease • Net lease • Escalator clause • Percentage lease
