Rental agreements: Not all rental agreements are alike, and, except for those that last more than one year, they do not have to be in writing.

It is recommended, obviously, that you put all rental agreements in writing to help avoid disputes or misunderstandings.

Real estate purchases: With an ordinary home purchase you may sign a "deposit receipt" or "purchase contract" that tells how much you will pay for the house, the amount of your deposit and down payment, and what is required of both the buyer and seller.

This document usually is a binding contract and you should read it carefully before signing. This document must be in
writing. The Statute of Frauds requires a contract for the sale of real property to be in writing and signed by all parties
to be valid and enforceable.

Oral contracts should be avoided in all real estate dealings. They are seldom enforceable. As the old saying goes, "Oral contracts are as good as the paper they are written on."

Loans: When you borrow money to buy a house you must sign a promissory note (a contract) that says how you will
pay back the loan and how much "interest" you will pay. You agree to mortgage (a contract) your property back to
the lender as security for the promissory note. 

In most cases, the contract may give a lender the right to "foreclose" or take back the home you are buying if
you don't make your loan payments on time.

Real estate options: An option is a unilateral contract.

Example: Let's say you had an option to buy a property. That means the seller must sell if you exercise your
option... but you are not required to buy.

In most cases a contract details a promise one party is making to another... and grants both parties certain powers if the other party fails to fulfill their part of the contract. As a real estate investor the most common contracts you will be using are purchase Agreements, Rental and Lease Agreements and Option Agreements.

You must be familiar with every line of these documents and be able to explain every contract detail to the satisfaction of the other party in your deal. If you will spend a little time studying each document you will see they really are easy to understand. 

If there is something you don't understand, find someone who can explain it to you. If you don't... that is the exact line someone you are trying to strike a deal with will ask you to explain! If you stutter and sputter... the deal could be lost!

Don't you be one of those people who is intimidated by contracts. Most contracts used in real estate are written in very understandable language. Always take the time to read each one carefully.