OREA agreements are all the necessary procedures that are required for real estate transactions to take place. There are many different agreements that each cover different aspects of real estate like:
1. The OREA listing agreement
This is an agreement that takes place between a seller and a real estate company. The seller looks to use the services of a real estate company to sell their property. The signing of this agreement gives the real estate company the mandate to act on behalf of the seller by showing the property to potential buyers in the market.
The listing agreement must be in written form so that it is easy to prove authenticity and also to:
i. Help real estate agents secure commissions
Without a written document proving that the agent and real estate company was involved in the sale of the property, it is hard for them to be able to claim their commissions.
ii. To ensure compliance with the code of ethics
Agents need to be able to uphold the code of ethics that govern their profession and their company. Having a written agreement shows that they understand what is expected of them, and they are to be held responsible for any behavior to the contrary.
The expiration date of the agreement is listed on the agreement so that both parties are able to plan around the time frame that they have.
2. Agreement to lease
This is an agreement that is between a landlord and a potential tenant. The landlord agrees to grant the tenant a lease. A leasing agreement does not give a tenant the right to ownership of the property immediately, and it states the right to possession at a future date. An agreement for lease is drawn up when there are conditions to be met by either party entering into the lease.
3. Terms contained in OREA agreements
Every agreement is unique in that each agreement provides for different terms from another agreement. Some of these terms are:
i. Financial terms
Real estate agreements contaprice is included in agreements, offerin all financial information on the sale or purchase of property. When a property is on sale, the listing price, counter offers, the deposit paid and the balance are all written down in formal agreements.
A seller states their preferred terms of payment and the buyer can choose to accept or give their independent offer. Financial terms are important to protect the interests of both the buyer and the seller.
ii. Sale or purchase timeline
Agreements contain the timeline for the transaction by clearly stating the deadlines on offers. It is important to keep to these deadlines and therefore it is contained in agreements for buyers and sellers to agree to respect deadlines. The deadlines also help sellers get their payment on the property because they list the deadline for making a down payment, this way clients do not complain when they are too late for an offer or a property.
iii. Condition and appliances in the property
It is important that a seller has a comprehensive list and the buyer is aware of all appliances that they find in the property. Some buyers may require the seller to install certain appliances in the home before purchasing, it is important that an agreement to that effect is signed so that both the seller and buyer can prove what was provided for and what was not.
4. Importance’s of the OREA agreements
i. Helps prove the Legality of the transactions
Agreements are binding and recognized by law and must be signed by both parties to show an understanding between the two sides. These makes dealing with legal issues easier because both parties have an agreement that they should both abide by.
ii. Helps solve conflict
Real estate agreements are clear cut and provide all the necessary information on the sale, purchase, acquisition and transfer of property. This eliminates room for conflict because both parties are aware of all the terms of the agreement and agree to sign the agreement without anyone forcing them to sign.
iii. Protect buyers and sellers
It is important to always protect the interests of buyers, sellers, owners, tenants and landlords. Entering into clearly drawn agreements helps to protect the interests of each party because the agreements contain conditions that each party to an agreement is comfortable with.