A real estate Contract is a legally binding document that lays out the terms of a transaction between two parties. It is generally used to purchase a home. However, it can also be used in other situations. These contracts often describe contingencies that must be met before the sale can proceed.
There are several key points to remember when writing a contract. The first is that it must be written in a clear, legal way. This is especially important when it comes to time-sensitive deals. When the document is improperly written, it can lead to problems. Additionally, it must be signed by all of the parties involved. If any of the parties does not sign the document, it is void.
In addition, a real estate Contract must have a proper legal purpose. For example, it must have a certain deadline for the purchase to be completed. Similarly, it should have a legal capacity for each of the parties involved.
Before the sale can begin, a real estate Contract must be signed by both parties. Typically, this means that both the buyer and seller must be at least 18 years of age. Sometimes, other conditions are required, such as a third party escrow account.
The contract must also specify whether the buyer will use a mortgage loan or down payment to pay for the property. It must also state who will pay for the closing costs. Closing costs can include escrow fees, title insurance, notary fees, and transfer tax.
In some cases, the seller and buyer can counter an initial offer. A counter offer may be the result of a negotiated price, proposed modifications, or a cancellation of the original offer. Although a counter offer is not a legally binding contract, it can serve as a means of settling a deal.
Lastly, a real estate Contract must specify the final purchase price. An initial offer may be conditional on the buyer receiving a favorable home inspection. This is a common contingency. As such, the contract must specify how long the buyer has to complete the inspection. Should the buyer not meet the timeframe, the contract will not be valid.
Real Estate Contracts must be drafted in a way that is understandable to all parties. They can be created from a template, or they can be created by an attorney. Using the wrong form can result in problems, so it is important to check all areas before signing.
One of the most important things to note is that a Real Estate Contract cannot be voided due to fraud. This is because courts will examine the intentions of the parties involved. Once a fraudulent deal is found, it will be invalid. Therefore, it is critical to have a thorough understanding of the law and the potential consequences before committing to a real estate Contract.
Regardless of the type of contract you are using, a well-written document is always recommended. Avoid abbreviations and ambiguous language.