| Contract | voluntary agreement between legally competent parties |
| Express contract | Oral or written contract |
| Implied contract | acts or conduct create a contract |
| Statue of frauds | certain contracts have to be in writing |
| bilaterial contract | both parties promise to do something |
| unilateral | an offer, one sided |
| Elements of a contract | offer & acceptance, consideration, legally competent parties, consent, and legal purpose |
| Offer | a promise made by one party requesting something in exchange for that promise |
| Acceptane | a promise made by the offeree to be bound by the exact terms proposed by the offeror |
| Consideration | something of legal value offered by one party an accepted by another |
| Void contract | has no legal forced because it lacks some or all essential elements |
| Assignment | transfer of rights under a contract; substitution of parties |
| Novation | substitution of a new contract for an existing contract |
| Suit for specific performance | a legal action to compel a party to carry out the terms of a contract |
| Recission | returns parties to original positions before the contract |
| Earnest money deposit | customary but not required when making an offer, evidence of a buyers intention |
| Equitable title | title transfers only upon delivery and acceptance of a deed, insurable interest in a property |
| Liquidated Damages | in the event one party breaches a contract, parties agree on certain amount of money that will compensate the non breaching party |
| Contingencies | creates a voidable contract, provisions that require a certain act to be done before the contract becomes binding |
| amendment vs addendum | amendment is a change to the existing contract. addendum is a provision added |
| disclosure | mandatory property condition disclosure laws which help consumers make informed decisions |
| Mortgage | conditional transfer of real estate as security for payment of a debt, the document that creates a mortgage lien, secured by a mortgage loan or deed of trust |
| Reverse Mortgage | age 62 or older to borrow money against the equity, repay when the property is sold |
| PITI | principal interest taxes and insurance, true cost of homeownership |
| equity | difference between the amount owed and its current market value |
| promissory note | contract with lender that sets out the terms under which a borrower promises to repay |
| interest | charge for the use of money; usury - charging an excessive rate; most home loans are exempt from usury laws |
| Discount points | percentage of loan amount |
