Real estate contracts are an important legal document that outlines the terms of a property sale. They are commonly used for both residential and commercial real estate transactions. These documents include specific information about the buyer and seller, the purchase price, closing costs, and contingencies.
Real Estate Contracts: Basics of an Agreement
A real estate contract is a legally binding document that identifies the parties, the details of the transaction, and a series of essential terms. It is often required by law to be in writing and must include signatures of both parties.
Whether you’re a first-time homebuyer or an experienced real estate professional, you can get started on drafting your own real estate contract with the help of free sample contracts. These templates are easy to use and can help you get the job done quickly and easily.
1. Start with the basics
When preparing your real estate contract, the most crucial part is to make sure that it contains all of the necessary information. These include the names, addresses, and contact information for both parties involved in the sale. It also needs to identify the purchase price, earnest money amount, and down payment.
2. Add a description of the property
A good real estate contract should be able to describe the property in detail and explain any potential issues or defects. This will help the parties avoid any disputes later on. It can also serve as a reference for the parties in case they have questions.
3. Identify the contract’s date and time of closing
A contract for sale will list the date that the transfer of title will occur, as well as the property taxes that will be paid by the buyer. This is an important piece of information, as it will give the seller a specific time frame to get ready for the sale and ensure that everything runs smoothly.
4. Identify all parties in the contract:
A real estate contract must be signed by all of the parties involved in the deal, regardless of their position. This includes both the buyer and seller as well as any contractors or other people who have to be accounted for during the sale process.
5. Gather electronic signatures:
A digital contract makes it easier to gather the correct signatures and ensure that everyone agrees to the terms of the contract. In addition, e-signatures are legally binding in all U.S. states and most other countries across the world.
6. Signing your contract with a lawyer:
If you have any questions about how to sign your real estate contract, it is always a good idea to consult an attorney. This is because attorneys will have the necessary expertise to understand your unique situation and offer the best possible advice.
7. Including contingencies:
Contingencies are conditions that are included in a real estate contract to allow the parties to back out of the deal if certain conditions are not met. This could include inspection details, financing, or any other condition that may arise during the course of the sale.