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Real Estate Contracts can work for you, or against you, or be completely neutral. From your initial offer to buy real estate to closing it is important to get it right. Having the right professional at your side will make all the difference, and put quite simply, could save you both time, money and hassle.
"Discussion" Becomes Commitment
Once the perfect home has been found, it is time for the house buyer to take the step that makes so many of us tremble with fear: the purchase and sale agreement. To take some of the mystery out of the house purchase and sale contract, we will discuss what real estate contracts involve and the components of most housing purchase and sale agreements.
First, remember that what you are signing is a legal contract. No matter what anyone says, you are not just making or accepting an "offer to buy real estate". Most real estate contracts will have some paraphrase of the following: "This is a legally binding contract. If not understood, seek competent advice before signing." To put it simply, if what is written on the contract regarding selling price and provisions is accepted by the seller, you have bought a home. Unlike other negotiable businesses, such as the automobile business, "would you take?" is defined in Real Estate by a legally binding contract backed with a monetary deposit.
Becoming familiar with the components of a real estate contract before you have one presented to you places you in a better position when it comes time to negotiate one.
For template and sample contracts, please Register.
Elements of a Real Estate Contract
Although there will be some variance based on the location of your residence, most Real Estate contracts contain most or all of the following items:
The Real Estate Purchase and Sale Agreement Contract |
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What: A legal description of the property as well as the street address. |
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How much: The selling price. |
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Mortgage contingency: Subject to obtaining a mortgage (if applicable) and the specifics of the mortgage--amount, rate and term. Application to be made in X number of days. |
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Deposit: How much money accompanies the contract and who will hold it. |
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Closing: When and where. |
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Inclusions and exclusions: What is and is not included in the sale of the property. |
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Home inspection: Contingency for and to be done in X number of days. |
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Warranties: Any that are included with the house and description of the warranty. |
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Condominium: If the property is a condo, other provisions will apply. |
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Well and Septic: If applicable, they must be tested (and pass). |
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Termite and Pest inspection: Who will pay and if there is infestation or damage, who will repair. |
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Possession Date: When the buyers take possession of the house--before, at or after closing. |
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Acceptance: How long the sellers have to respond to the offer with either acceptance or a counter-offer. |
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Arbitration: Any provisions for arbitration of disputes. |
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Insurance: Whose insurance covers the property up until the closing date. |
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Property Disclosures: Notices of any property disclosures concerning the house. | |
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Agent Responsibilities
Buyer's Agent
Offer to Purchase (Seller)
Buyer Making An Offer
Warranties
Townhouse & Condo Associations
Listing With an Agent
HUD Settlement Statements
Closing
For template and sample contracts, including Purchase & Sale, Leases, Commercial Transactions, Sublets, Options to Buy, and much more, please Register. You will receive an email with a user name and password. If you have already registered, please click the Login button on the main menu at left.
Important Note: The exact wording of the sales contract will vary from locality to locality (and sometimes even within localities), but by being prepared to see at least the items listed at left, you will be in a better position when it comes time for the Agent or Lawyer to ask for your signature! |
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