Question 1

How are unilateral contracts used in real estate?

Accepted Answer

RE uses: option contracts (the seller grants the buyer an option to purchase; the buyer pays option consideration; the buyer is not obligated to exercise; the seller is obligated to sell if the buyer exercises), listing agreements (some listing agreements are unilateral: the seller promises to pay a commission; the broker earns the commission by producing a buyer; the broker is not obligated to find a buyer), reward/finder’s fee (a property owner offers a reward for finding a buyer; the contract is formed when someone produces a buyer), and open offers (a developer offers properties at a stated price; the contract is formed when a buyer accepts by signing a purchase agreement).

Question 2

What are the key considerations for RE option contracts?

Accepted Answer

Option considerations: option period (the length of time the buyer has to exercise the option: days, months, or years), option price (the consideration paid for the option: typically 1-5% of the purchase price; the option price may or may not be credited toward the purchase price), exercise procedure (the buyer must exercise the option in strict compliance with the terms: written notice within the option period), purchase price (the price at which the buyer can purchase the property: typically fixed at the time the option is granted), and assignability (whether the buyer can assign the option to a third party: should be addressed in the option agreement).

Question 3

How are unilateral RE contracts enforced in Florida?

Accepted Answer

Enforcement: the offeree must prove: the existence of the offer (the offeror made a clear promise with definite terms), performance (the offeree completed the requested act: found the buyer, exercised the option, or performed the condition), and compliance (the offeree performed in strict compliance with the terms of the offer: within the time period, in the manner specified, and with proper notice). If the offeree performs: the offeror is bound (the promise becomes enforceable). Remedy: specific performance (the court orders the offeror to convey the property) or damages (the difference between the option price and the fair market value). Statute of frauds: applies to RE options (must be in writing; Section 725.01).

Unilateral Contract: in Real Estate

Unilateral Contracts in Real Estate

RE Uses

Option Details

Enforcement

Related Terms

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