Real Estate Purchase Contract: Preparing For Signing Day
The purchase of a home or property is one of, if not the biggest purchase many people will ever make. It is a lengthy often stressful situation that must be evaluated and analyzed before a decision is made. The contract involved is our way to protect the transaction as well as ourselves. What exactly should be contained in a purchase contract is extremely important. As the success of the purchase completely depends on it. There are some basics that must be included in the contract. Then there are some not so basic clauses that should be included as well.
First, the parties must be identified in purchase contracts. In most cases, there are either two or three parties; the buyer, the seller, and the real estate contract lawyer. Second, the property must be listed by address, and preferably the legal description, such as the boundaries or its legal zoning attributes. An additional description that is helpful is the current status of the property, for example if it is sold as is, or with conditions that apply. Third, the signatures and dates of the signing day. The signatures seal the contract and show each party is consenting to the transaction on the listed day. In some cases, even a notary is required to ensure that the signatures are authentic.
Not so basic
Outside of the clauses above, there are almost an endless possibility of additions that can be included. More relevant to the purchaser are the finance terms. If a mortgage is needed for the purchase, which is most cases it is, this should be included along with a contingency of the necessary interest rate. Financing can often fall through last minute and the seller should be protected in this case. A second important note is how the closing cost are divided. When a property transaction occurs, there are additional fees that arise such as title transfers, property taxes, and payment to the agents. If the property is not sold in an “as is” condition, then a property inspector is usually needed to reveal any shortcomings. The whole contract in fact can be conditional upon this, such as if the foundation is faulty or termites are found. In addition, the buyer can make the current contract conditional upon the legal sale of their real estate in order to free up needed funds for the new purchase.
The contract for a home or property was instituted to protect both parties so each individual can walk away benefiting from the transaction. Competent experts can recognize in no time if the contract is one sided, or what should be included or excluded. When the big day comes and all involved parties sign the contract it should be certain that all bases are covered and it will go as smoothly as possible.