Ohio Real Estate Contract: Different Types and Key Terms to Include

What is an Ohio Real Estate Contract?

An Ohio real estate contract, also called a residential purchase and sale agreement, is a contract that facilitates the sale of real property between a seller and a buyer. The purpose of a real estate contract is to lay out the terms and conditions of the sale and provide both parties with protections throughout the transaction.

Real estate contracts are most commonly used for purchasing and selling residential homes, but real estate contracts are also used for commercial properties, investment properties, and rental properties.

Common Ohio Real Estate Contracts

There are several types of real estate contracts that can be used in Ohio. The following examples are two contract templates often used by realtors:

1. Columbus Realtors contract. A fillable contract that has been adopted for use by the Columbus Realtors Association. It is approved by the Columbus Bar Association and includes all necessary terms and conditions for real estate contracts under Ohio state laws.
2. Transfer Title Purchase Agreement. A more simplified version of a residential purchase and sale agreement. This contract could be filled out by private parties without the help of a realtor, but it is important to contact a realtor or a real estate agent if either party has trouble understanding the terms of the contract.

4 Essential Elements of an Ohio Real Estate Contract

The Ohio revised code defines a contract as an agreement by parties to be governed in their rights and duties under the agreement. For a contract to be legally binding and valid in Ohio, it must include the following 4 essential elements:

1. Offer. All contracts must include a valid offer. In a real estate contract the offer is made by the buyer.
2. Acceptance. The seller has the right to either accept or deny the offer made by the buyer. If accepted, the real estate sale can move forward.
3. Consideration. Consideration is the part of the contract that requires the parties to trade sometimes of value. In real estate contracts, this is typically money in exchange for the property.
4. Legal purpose. The contract must have a legal purpose and the terms cannot violate the law or encourage the parties to violate the law.

Without these essential elements, a real estate contract is invalid and cannot be enforced.

Does a Real Estate Purchase Agreement Need to be Notarized in Ohio?

No. A real estate purchase agreement in Ohio does not need to be notarized, but it is highly recommended that the contract be signed in the presence of a notary public. Notarizing the document serves as proof that the signatures on the document are genuine and that the parties involved legally and voluntarily signed the agreement.

Is an Earnest Money Deposit Required in Ohio?

An earnest money deposit is not required by law in Ohio, but it is a common practice in the state. An earnest money deposit, also known as a good faith deposit, is a sum of money paid by the buyer to the seller at the time of entering into a real estate contract. The deposit is held in escrow and is typically applied towards the purchase price of the property at closing.

The purpose of the earnest money deposit is to show that the buyer is serious about purchasing the property and to provide some financial commitment to the sale. The amount of the deposit can vary, and it is usually between 1% and 3% of the total purchase price. The terms of the earnest money deposit, including the amount and the conditions for returning it, should be clearly outlined in the real estate contract.