Ohio Real Estate Contracts Guide for the Exam

Ohio Real Estate Contracts Guide

Contract law is heavily tested on the Ohio real estate exam. Both the national content (approximately 13 questions) and the state section address contracts, contingencies, and Ohio-specific rules like the Residential Property Disclosure Form and judicial foreclosure through mortgage instruments.

Elements of a Valid Contract

All real estate contracts must satisfy six requirements:

1. Offer and Acceptance — definite offer + unconditional acceptance
2. Consideration — something of value exchanged
3. Competent Parties — legal age and mental competence
4. Legal Purpose — cannot require illegal acts
5. In Writing — Ohio follows the Statute of Frauds for real estate
6. Consent — free from fraud, misrepresentation, duress, or undue influence

Ohio Purchase and Sale Agreement

A standard Ohio purchase and sale agreement includes:

• Identification of buyer, seller, and property
• Purchase price and financing terms
• Earnest money amount and escrow holder (broker's trust account)
• Contingencies (financing, inspection, appraisal)
• Closing date and possession date
• Reference to the Ohio Residential Property Disclosure Form
• Included/excluded fixtures and personal property

Ohio has NO mandatory attorney review period (unlike New Jersey). Once the contract is signed and all contingencies satisfied, the parties are bound.

Ohio Residential Property Disclosure Form

Ohio Revised Code requires that sellers of residential property complete the Ohio Residential Property Disclosure Form before the buyer makes an offer (or as part of the transaction). The form discloses:

• Known structural defects
• Water and sewage system condition
• Electrical, plumbing, and HVAC systems
• Environmental hazards
• Any known issues with the property

Important: this disclosure is required even in "as is" sales. "As is" does not eliminate the seller's obligation to disclose known material defects.

Common Contingencies in Ohio Contracts

Financing contingency: Buyer may cancel if they cannot obtain a mortgage on specified terms. Inspection contingency: Buyer may request repairs or cancel based on inspection results. Appraisal contingency: If the property appraises below the purchase price, the buyer may renegotiate or cancel. Homestead/Backup contingency: Seller may accept backup offers pending the primary contract.

Ohio Mortgage and Judicial Foreclosure

Unlike states that use a deed of trust (where a non-judicial trustee sale can occur), Ohio uses a mortgage instrument. Foreclosure in Ohio is a judicial process:

1. The lender files a lawsuit in Ohio court
2. The court issues a judgment
3. A sheriff's sale is ordered
4. The property is sold at public auction under court supervision

This judicial process provides more protections for the homeowner but takes longer than non-judicial foreclosure.

Earnest Money in Ohio

Earnest money is held in the broker's trust account. It is applied to the purchase price at closing. Ohio licensees must handle trust account funds in accordance with OREPL rules. Commingling client funds with personal funds is a license law violation.

Contract Remedies in Ohio

• Rescission: Both parties return to pre-contract positions
• Specific performance: Court orders completion of the sale (available because real property is unique)
• Compensatory damages: Money to make the non-breaching party whole
• Liquidated damages: Earnest money as agreed-upon damages in case of buyer default

For full Ohio exam prep, visit [CARealestate.com/states/ohio](https://carealestate.com/states/ohio).