A real estate Contract is an official document that outlines the terms of sale between a buyer and seller. The document also describes any contingencies that must be met before the sale is finalized. These include home inspections, financing and title insurance issues. The document will describe the property address, purchase price and names of both parties. It will also state whether the seller has a mortgage or is paying cash for the property. In addition, the contract will provide details about the closing date and closing costs. Finally, the document will identify who is responsible for property taxes.
The most common type of real estate contract is the purchase agreement. This document will list the property address, purchase price, names of both buyers and sellers and signatures to make the document legally binding. The document will also identify the parties’ current home addresses and contact information. If there are multiple buyers, the contract will indicate whether the buyers are buying the property as tenants in common or joint tenancy.
When building a real estate contract, both the buyer and seller will make offers and counteroffers to negotiate the terms of the sale. This is often done between the buyers and sellers’ real estate agents. During this process, the parties will adjust the purchase price, closing costs and contingencies of the agreement. This negotiation period is a critical part of the real estate transaction.
The contract will include an option to terminate the deal if certain conditions are not met. This is commonly used when a buyer’s mortgage financing is not approved or when an inspection reveals major problems that the buyer is not comfortable with. Typically, the buyer can forfeit their down-payment to the seller as liquidated damages for terminating the contract early.
In some cases, the real estate contract will also include a home warranty. This can be a valuable protection for the buyer. The contract will outline the terms of the warranty and who is responsible for related costs.
A real estate assignment contract is a special type of real estate purchase contract. This type of document is used in a wholesaling investment strategy, where the investor will find a distressed property, secure it under contract and then “assign” the contract to another buyer.
While these types of contracts are less common, they can be useful for investors who want to take advantage of this investment strategy. Unlike traditional purchase agreements, real estate assignment contracts will usually have specific clauses that address the unique needs of this investment strategy. To create a real estate assignment contract, an investor can use a standardized form or work with a lawyer to customize the document. A good lawyer can help ensure that the document is clear and understandable, which will reduce the likelihood of legal disputes down the road. If you’re looking for a skilled real estate attorney, click here to connect with ContractsCounsel today.