Real Estate Sales Contracts

Question 1

Binder

Answer 1

A short purchase contract used to secure a real estate transaction until a more formal contract can be signed

Question 2

Default

Answer 2

Failure to perform a legal duty, such as failure to carry out the terms of a contract

Question 3

Earnest money deposit

Answer 3

Money that accompanies an offer to purchase as evidence of good faith

Question 4

Equitable title

Answer 4

The right to demand that title be conveyed upon payment of the purchase price

Question 5

Installment contract

Answer 5

A method of selling and financing property whereby the seller retains title but the buyer takes possession while making the payments

Question 6

Lease-option

Answer 6

Allows the tenant to buy the property at preset price and terms for a given period of time

Question 7

Right of first refusal

Answer 7

The right to match or better an offer before the property is sold to someone else

Question 8

“Time is of the essence”

Answer 8

A phrase that means that the time limits of a contract must be faithfully observed or the contract is voidable