Real Estate Unit 11

Virginia

Amendment

A legal document that modifies, adds to, or deletes terms from an already signed contract, such as a purchase agreement or lease

Assignment

A legal transaction where the original buyer (assignor) transfers their rights and obligation under a purchase agreement to a new buyer (assignee) before the closing date.

Bilateral Contract

A legally binding agreement where both parties exchange mutual promises to perform specific actions, creating obligations for each.

Breach of Contract

Occurs when a party to a legally binding agreement (buyer or seller) fails to fulfill their obligations, such as closing on time, securing financing, or delivering a clear title.

Consideration

Essential, Bargained-for value exchanged between parties to make a contract legally binding, typically representing the purchase price, services, or promises given in exchange for the property title.

Contingencies

Specific conditions, clauses, or requirements that must be met for a purchase contract to become legally binding and for the sale to proceed.

Contract

A legally binding written agreement between parties for the purchase, sale, exchange, or lease of real property.

Counteroffer

A formal, time-sensitive response to an initial purchase offer that rejects the original terms while proposing new ones. It voids the previous offer, allowing negotiations to continue until both parties accept or walk away.

Disclosure

A legal requirement for sellers to formally inform potential buyers about known material defects, issues, or hazards affecting a property’s value, safety, or desirability before a sale closes.

Duress

Occurs when a party is forced into a contract or transaction against their free will through illegal threats, coercion, or intimidation, rendering the agreement voidable.

Earnest Money

A “good faith” deposit made by a buyer to a seller, confirming a serious intent to purchase a home and securing the contract while taking the property off the market.

Enforceable Contract

A legally binding agreement that satisfies all essential elements, offer, acceptance, consideration (value exchanged), capacity, and lawful purpose, allowing parties to compel compliance in court.

Executed Contract

A legally binding agreement where all parties (buyer and seller) have fully performed their contractual obligations, such as closing the sale, transferring the title, and paying the purchase price.

Executory Contract

An agreement where material obligations remain to be performed by both parties, typically the buyer and seller, before the transaction closes and ownership is fully transferred.

Fraud

The intentional manipulation, theft, or mismanagement of a deceased person’s assets, or assets in trust, by someone in a position of authority, such as an executor, trustee, or person with a power of attorney.

Implied contract

A legally binding agreement formed by the actions, conduct, or circumstances of the parties rather than a written or verbal agreement.

Land Contract

A legally binding agreement in which seller (vendor) provides financing directly to a buyer (vendee) for real estate, allowing the buyer to make installment payments rather than obtaining a traditional mortgage.

Liquidated Damages

Pre-agreed, set amount of money, often the earnest money deposit, that a buyer pays to a seller if the buyer breaches the contract. (e.g., backing out without a valid reason)

Misreprentation

The act of providing false, misleading, or incomplete information about a property, which induces a buyer to enter into a contract.

Novation

The legal process of replacing an existing contract, obligation, or party with a new one, extinguishing the original agreement entirely.

Offer and Acceptance

The foundational legal process forming a binding contract, where a buyer proposes specific terms (offer) and a seller agrees to them without modification (acceptance)

Option

Legal contract where a property owner (optionor) grants a potential buyer (optionee) the exclusive right to purchase or lease a property at a set price within a specific timeframe.

Owner Financing

An arrangement where the property seller acts as the lender, allowing the buyer to make payments directly to them rather than obtaining a traditional bank mortgage.

Purchase Money Mortgage

A seller-financed transaction where the seller acts as the lender, taking a mortgage directly from the buyer to secure part of all of the property’s purchase price.

Recession

A period of diminished housing market activity, typically characterized by declining sales volume, weakened buyer demand, and stagnating or falling home prices.

Statute of Frauds

A legal doctrine requiring contracts for the sale, lease, or transfer of land to be in writing and signed by the parties to be enforceable.

Suit for Specific Performance

In an equitable remedy, a court orders a breaching party to fulfill their contractual obligations, usually closing the sale rather than paying monetary damages.

“Time is of the Essence”

A contract clause specifying dates, such as closing, financing, or inspection deadline.

Undue Influence

A legal claim where one person uses excessive persuasion, coercion, or trickery to overpower another’s free will, forcing a property transfer, deed change, or estate plan amendment that benefits the influencer.

Unenforceable Contract

One that has the elements of a valid contract (offer, acceptance, consideration, ect.) but a legal rule prevents a court from enforcing it, most commonly due to the Statue Frauds, duress, fraud, misrepresentation, or an illegal purpose.

Unilateral Contract

Is a one-sided agreement where one party (the offeror) makes a binding promise to perform a specific action ( e.g. pay a commission, sell a property) only if another party (the offeree) chooses to perform a specific task.

Valid Contract

A legally binding agreement between a buyer and seller meets specific legal requirements, competent parties, mutual consent, lawful purpose, and consideration, making it enforceable in court.

Void Contract

A legal agreement that is invalid and unenforceable from its inception is treated as if it never existed. It lacks essential legal elements, such as legality of object, capacity of parties, or mutual consent, meaning neither party can enforce it in court,

Voidable Contract

A valid, binding agreement that one party has the option to reject or enforce due to specific legal defects, such as fraud, duress, misrepresentation, or lack of capacity.