Key Takeaways
- West Virginia follows the Statute of Frauds requiring real estate contracts to be in writing
- Valid contracts require offer, acceptance, consideration, legal capacity, and lawful purpose
- Earnest money should be deposited into the broker's trust account promptly
- Contingencies for financing, inspection, and appraisal are common in WV transactions
- Time is of the essence clauses make deadlines legally binding
West Virginia Contract Requirements
West Virginia real estate contracts must meet specific legal requirements to be valid and enforceable.
Statute of Frauds
Under West Virginia's Statute of Frauds, contracts for the sale of real property must be:
- In writing
- Signed by the party to be charged (or their authorized agent)
Key Point: Oral agreements to sell real estate are generally unenforceable in West Virginia.
Essential Elements of a Valid Contract
| Element | Description |
|---|---|
| Offer | Clear proposal with definite terms |
| Acceptance | Unequivocal agreement to the offer's terms |
| Consideration | Something of value exchanged (usually money) |
| Legal capacity | Parties must be competent to contract |
| Lawful purpose | Contract cannot be for illegal purposes |
| In writing | Required for real estate contracts |
Types of Real Estate Contracts
Purchase Agreement
The main contract for buying/selling real property:
| Component | Description |
|---|---|
| Parties | Buyer and seller identification |
| Property description | Legal description of the property |
| Purchase price | Agreed-upon price |
| Earnest money | Good faith deposit amount |
| Contingencies | Conditions that must be met |
| Closing date | When transfer will occur |
| Signatures | All parties must sign |
Listing Agreement
Contract between seller and broker:
| Type | Description |
|---|---|
| Exclusive right to sell | Broker earns commission regardless of who sells |
| Exclusive agency | Broker earns commission unless seller finds buyer |
| Open listing | Multiple brokers; only selling broker earns commission |
Buyer Agency Agreement
Contract between buyer and broker establishing representation relationship.
Earnest Money
Earnest money (good faith deposit) shows the buyer's serious intent:
Handling Requirements
| Requirement | Details |
|---|---|
| Deposit timeline | Immediately or by next business day (per contract) |
| Where deposited | Broker's trust account |
| Who holds | Licensed broker (not salesperson) |
| Disbursement | Per contract terms or mutual agreement |
Common Contract Contingencies
Contingencies allow parties to exit the contract if certain conditions aren't met:
Financing Contingency
| Element | Details |
|---|---|
| Purpose | Buyer can cancel if financing not obtained |
| Deadline | Must apply for loan within specified days |
| Documentation | May require denial letter from lender |
| Protection | Buyer's earnest money typically returned if denied |
Inspection Contingency
| Element | Details |
|---|---|
| Purpose | Buyer can inspect property and negotiate repairs |
| Timeline | Inspection period specified in contract |
| Options | Accept, negotiate repairs, or cancel |
| Scope | May include home, pest, radon, septic, well inspections |
Appraisal Contingency
| Element | Details |
|---|---|
| Purpose | Protects buyer if property appraises below purchase price |
| Options | Seller reduce price, buyer pay difference, or cancel |
| Lender requirement | Most lenders require appraisal |
Sale of Buyer's Property Contingency
Allows buyer to cancel if they cannot sell their current property.
Contract Termination
Contracts may be terminated by:
| Method | Description |
|---|---|
| Performance | Both parties fulfill obligations |
| Mutual agreement | Both parties agree to cancel (mutual release) |
| Contingency not met | Condition specified in contract fails |
| Breach | One party fails to perform |
| Impossibility | Performance becomes impossible |
| Expiration | Offer expires before acceptance |
Time is of the Essence
Many West Virginia real estate contracts include a "time is of the essence" clause:
- Deadlines are strict and legally binding
- Missing a deadline may constitute breach of contract
- Extensions require written agreement from all parties
- Courts will enforce time provisions strictly
Contract Status Terms
| Term | Meaning |
|---|---|
| Executory | Contract signed but not yet completed |
| Executed | Contract fully performed by all parties |
| Void | Contract has no legal effect from start |
| Voidable | Contract valid but can be rescinded by one party |
| Unenforceable | Contract cannot be enforced in court |
Exam Tip: Understand the difference between an executory contract (not yet performed) and an executed contract (fully performed).
Under West Virginia's Statute of Frauds, which statement is TRUE about real estate contracts?
Where should earnest money be deposited in a West Virginia real estate transaction?
What does "time is of the essence" mean in a real estate contract?