Contracts
In Maryland, a bilateral contract in real estate is one where:
AOnly one party makes a promise
BBoth parties exchange mutual promises✓ Correct
CThree parties are involved in the agreement
DThe contract is conditioned on a future event
Explanation
A bilateral contract involves mutual promises by both parties — for example, the seller promises to convey and the buyer promises to pay. Most real estate contracts are bilateral.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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