Preparation of Contracts - Discussing four types of contracts in real estate

August 07, 2019

Preparation of Contracts - Discussing four types of contracts in real estate

Disclaimer: This post does not constitute legal advice. For legal advice, please contact an attorney directly.

Preparation of Contracts

To draft the wording of legal documents or legal instruments for others is considered practicing law. Because very few real estate licensees are attorneys, real estate brokers and sales associates may not prepare deeds, mortgages, promissory notes, or most other legal documents.

Authority of Real Estate Licensees to Prepare Contracts. Florida real estate agents may not draw or compose lease agreements. However, REALTORS® or licensees may fill in the blanks on lease instruments for lease periods that do not exceed one year that has been pre-approved by the Florida Supreme Court.

REALTORS® are permitted to assist buyers and sellers with the drawing of four types of contracts:

Listing agreement.A listing agreement is a broker’s employment contract w/ a seller. Typically, it is the sales associate who obtains the listing on behalf of the broker.
Buyer brokerage agreement.
A buyer broker agreement is an employment contract with a buyer. This legally binds the buyer to the real estate agent.
Sale and purchase contract.
A sale and purchase contract is a contract between a buyer and a seller. If the REALTOR® acts as an agent or facilitator for one or both of the contracting parties, the REALTOR® may prepare the sale and purchase contract.
Option contract.An option contract is an agreement to keep open for a specified period of time an offer to sell or lease real property. Both seller and buyer should strongly consider hiring a real estate attorney to draw or compose option contracts.

Real estate brokerage offices typically use standardized listing agreements, buyer brokerage agreements, sale and purchase contracts, and option contracts. The Florida Realtors® and other professional groups have developed standardized contracts for use by their members. This is desirable because the use of standardized contracts improves efficiency and greatly reduces liability.

Disclaimer: This post does not constitute legal advice. For legal advice, please contact an attorney directly.