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Parties to Real Estate Contracts | Real Estate Exam Prep Videos - YouTube
Channel: The Real Estate Classroom
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one thing that I can guarantee you that
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you need to know for your real estate
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licensing exam you have to know who the
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parties to contracts are and what their
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legal names are we're gonna talk about
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that in this video
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[Music]
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everybody my name is Paul for Chesky and
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welcome to the real estate classroom
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YouTube channel just a place that if
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you're student studying for your real
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estate exam you could come and watch
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these videos that'll help you pass your
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real estate licensing exam hey do me a
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favor real quick before we get started
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give this video a thumbs up hit that red
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subscribe button click that notification
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bell and please you know somebody that's
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studying for the real estate exam I
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would appreciate it if you would share
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this channel and this video with them
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alright in today's video we're gonna
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discuss parties to contracts and what
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those parties legal name what their
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Neagle legal names are this actually
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comes to you by request I have I've had
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several students over the past couple of
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weeks say hey can you kind of just put
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it all into a graph for us all the
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parties what they're called to each of
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the specific real estate contracts so
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that's what I'm gonna do in this video
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so the way I got this set up is here are
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the parties to a contract we have the
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buyer the seller or the owner the lender
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the third party a tenant and then
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whether or not the contract is a
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unilateral contract or a bilateral
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contract two real estate terms that you
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have to know and you have to know it
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what type of these contracts here are
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they unilateral or bilateral now just to
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kind of recap or review what that means
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a unilateral contract means there is
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more than one party to the contract but
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it's only binding on one party but not
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the other a bilateral contract is once
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the contract it's signed it is it is
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enforceable by all the parties it's
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binding on all parties to the contract
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and one other thing before we get
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started understand I've said this in
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many of the other videos here we know
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that there are parties to the contract
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for example a buyer and a seller but
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they all have legal names that we have
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to know alright and that's what we're
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talking about here so let's take a look
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so the first one we have is the offer to
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purchase now when a buyer makes an offer
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on the property they have a legal name
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the seller is going to
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receive that offer they have a legal
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name all right so the the buyer is the
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offer or oh ffs ero are the offer or
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because they are the give or of the
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contract and the seller is the offer e e
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re e with two e's and they're a offer to
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purchase it's an open contract so it's
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really not a contract so it's neither
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it's neither unilateral or bilateral at
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this point now once the offer to
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purchase has been agreed to meaning all
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the parties the buyer and the seller
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have signed it it becomes a purchase
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contract and the purchase contract
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becomes legally enforceable on everybody
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so we got to give them legal names all
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right so the buyer becomes the grant T G
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RA and T EE and the seller becomes the
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grant tor all right and the reason they
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switched is here the buyer was the
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Argives or of the contract and the
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seller was the receive e but once the
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contract is agreed to the grantor the
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seller is giving the title and the
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grantee is going to receive the title at
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the closing table now purchase contract
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once it's been agreed to it is a
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bilateral contract
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it's a bilateral contract because it is
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legally enforceable by all parties so if
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one of the parties breaches the other
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one could go into court and seek remedy
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land contract is another one all right
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so the ven door ve and dor the vendor is
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the owner in the vend茅e with two e's is
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the person receiving the land contract
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or the buyer seller financing here and
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this is for a different video but a land
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contract is a type of seller financing
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now the lender is the owner of the
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property and this is a bilateral
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contract because once that long that
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land contract or sometimes
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called a contract for deed very
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important that you know the AKS here it
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is legally enforceable by all parties
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all parties are expected to perform as
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the terms of the contract requires lease
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contract lease contract all right we
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have the owner and the owner is has a
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legal name that's called the less or and
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then the tenant is the less II with two
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E's and it is the the lease contract is
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as well a bilateral contract so once
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it's signed then the tenant and the
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Landlord are bound by the terms of it an
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assignment of contract an assignment of
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contract now for the assignment of
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contract we got two parties here we have
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the buyer of the assignment they are
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called the assign e with two E's and the
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seller or give or of the contract or the
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of the contract yeah is the assign or we
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are now this is for a different video as
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well but I'm going to kind of briefly
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describe how this works anytime we have
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an assignment of contract that means
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there's already some type of contract in
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place that's being assigned let's to
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look at a lease agreement for example
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the lease contract is between the owner
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or the landlord and the tenant so the
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lease is held by the tenant they are the
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owner of that lease contract the owner
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of that lease contract the tenant can
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assign it to somebody else and so what
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happens is the owner or giver of the
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assignment is the owner of that
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assignment so the tenant would therefore
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be the owner of the assignment so they
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are the assign or and then the person
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the sub tenant would be the assignee now
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I did a a video on this that outlined
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what I was talking about as far as lease
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contracts and
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Alysse that video really explains this
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concept really well I'm gonna put a
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video right our videos link right up
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here in the upper right hand corner of
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the screen here you can click on that
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for more information
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alright mortgage mortgage two terms you
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have to know for your real estate
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licensing exam we have the buyer or the
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borrower who is the mortgage or yes Oh
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our mortgage or and the lender is the
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mortgage II with two e's now I know it's
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a little confusing because you're saying
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well it's the lender who's giving the
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mortgage I understand that but in this
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role they flip and you just have to know
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who is sue here and the way I remembered
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this when I was sitting where you are as
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a student there are two E's in mortgagee
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and there are two E's and lender that
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was my little shortcut that I use to
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remember these two terms the next one I
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want to talk about is ad to trust now ID
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to trust is actually going to have three
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players here all right the first one is
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called the trust or the trust or low AR
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and the lender is the beneficiary and
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then the third party is the trustee now
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I'm going to have a different video on
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how the DD trust works but just to kind
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of explain here is when the buyer closes
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on the house what they're technically
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doing they are the trust or they're
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giving over the collateral to the third
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party and the third party's going to
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hold that collateral until the notice
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paid off and in case that note it goes
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into vault if the borrower defaults then
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the trustee at the request of the bank
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who's the beneficiary they can then
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foreclose on the property I'll explain
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that in a future video for this video
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though I just want you to know who the
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different parties are and then the last
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one I want to talk about here oh by the
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way let's go back up here assignment of
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contract it is a bilateral
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contract it is a bilateral contract a
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mortgage is a bilateral contract and a
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deed of trust is a bilateral contract
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because all of those contracts require
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that once they're agreed to and
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everybody signs it's legally enforceable
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by all parties the last one I want to
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talk about is a listing contract now a
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listing contract is between the seller
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in the brokerage firm it's a type of
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employment contract and what it is is
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it's a unilateral contract all right and
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there really is no legal terms that we
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have to know for the listing contract
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but here's the thing I did inquire to
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psi which is one of the testing
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companies they will not ask a student
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whether or not a listing contract is a
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unilateral or a bilateral contract and
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the reason is is there is some a lot of
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debate about this and you can go to any
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principles in practice book and let's
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say you read through five of them you're
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gonna get two or three different answer
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answers some of the the books will tell
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you it's a unilateral contract some will
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tell you it's a bilateral contract same
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thing in some of the law books I when I
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was doing the research for this I read
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through about three or four different
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lost law books and half of them said it
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was a unilateral contract and some said
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that it was a bilateral contract but
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overall if you were doing the averages
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most of them said they were unilateral
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another theory is its unilateral up to
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the point that there's a purchase
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contract put in place and then it's
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bilateral because at that point the
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seller is owed or owes a commission to
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the listing company the point I wanted
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to make here for you as the student is
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you're not going to be asked on a test
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question whether or not a listing
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contract is unilateral or bilateral so
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having said that this is the schematic
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for all the different parties to a
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contract and what we call what's the
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party's legal names
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all right if you're going to continue
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your studies don't forget to check out
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this video and if you have not
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subscribed to our channel please do so
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click the little circle to my left I
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will see you in tomorrow's video
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