Consideration

What is a consideration? 

In the context of real estate, consideration is essentially the price or payment that one party offers in exchange for an item from another party. It represents the value agreed upon as part of the contractual arrangement, serving as the tangible expression of the promise. 

What is an example of consideration? 

A simple example of consideration could be a person promising to sell their home for $700,000, and the buyer agreeing to pay that exact amount. In this case, the consideration is the $700,000, which the buyer gives in exchange for the promise to sell the home. 

Is consideration only in the form of money? 

No, consideration is not always cash. While it can involve a monetary payment, it can also include various forms of value, such as goods, services, or even a promise to do something. As long as there is a mutual exchange of something of value between the parties, it satisfies the requirement of consideration in a contract. 

An example of a non-cash consideration in a contract could be the exchange of services. For instance, if a buyer offers to make repairs to a property in exchange for a reduced purchase price, the buyer's commitment to perform the repairs represents a non-cash consideration.