IN 4.0 hours Avoiding Common Mistakes - Course Syllabus
4.0 Elective Hours
A contract is said to be fully acknowledged once it has been signed by both parties, the purchaser, and the seller. This constitutes a legally binding contract and is also known as mutual acceptance. Changes to the contract after mutual acceptance can only be made if both the buyer and the seller agree to the changes. Both parties must either sign or initial and date the changes.
When changes are made, it is important to notify and re-copy those parties who may already have a copy of the contract. These parties may include the buyer, the seller, the listing broker's transaction file and their brokerage's transaction file, the buyers' broker's transaction file and their brokerage's transaction file, the closing agent (escrow), and the lender.
There are circumstances that arise where something changes during a transaction. The need for additional paperwork may be desired. Again, it must be remembered, that any additions to the contract after mutual acceptance can only be made if both parties agree. If changes, additions, or deletions are made, both parties must initial or sign and date the item or clause that has been changed, added, or deleted. It is illegal to make any change to a contract without the agreement and initials of both parties.
As stated earlier, a contract is legally binding. If the buyer or seller chooses to cancel a contract, they could be found guilty of a breach of contract which is also known as a default. If a buyer defaults, they could lose their earnest money or be sued by the seller for non-performance or damages. The remedy that is available is clearly defined on page 1 of the Purchase and Sale Agreement. If the seller defaults, there is a possibility that the buyer could sue for damages.
This course explores some of the more common mistakes made by new real estate licensees and those who have been in the real estate business for many years. Emphasis is placed on how to modify contracts.