Contracts, Purchase and Sale Agreements, and Closing
Contract fundamentals
A valid contract needs offer, acceptance, consideration, capacity, lawful purpose, and mutual assent - and real estate contracts must satisfy the statute of frauds: written and signed by the party to be charged. A counteroffer terminates the original offer; an acceptance that changes any term is a counteroffer. Acceptance is effective on communication. Contingencies (financing, inspection, appraisal, sale of the buyer's home) keep the contract alive conditionally; a contract "subject to" something is contingent, not void.
Key clauses
Know earnest money (often liquidated damages if the buyer defaults), time-is-of-the-essence, risk of loss, equitable conversion (buyer bears risk once the contract is enforceable, subject to the contract terms), assignment, default remedies (damages, specific performance, rescission), and the inspection and financing escape hatches.
Closing mechanics
Closings in Missouri are commonly handled by a title company or attorney. The deed must be delivered and accepted - signing alone transfers nothing - then recorded. Title insurance, prorations, payoff of existing liens, and disbursement flow through the closing statement. Brokers may complete blanks on promulgated forms; drafting new legal language is unauthorized practice of law.
Traps
Questions often test whether a "yes, but" acceptance formed a contract (it did not), whether earnest money is refundable (depends on the contingency language), and whether an escrow agent represents buyer or seller (neither - it is a neutral stakeholder).
Worked example
Buyer offers $300,000. Seller counters $310,000. Buyer replies, "I accept $310,000 but seller pays $3,000 of my closing costs." The buyer has made a new counteroffer; no binding contract exists, and the original $300,000 offer is gone.