Contracts play an important role in defining expectations and parameters of real estate transactions. A purchase contract governs any real estate property sale and helps both parties understand their roles, rights and responsibilities.
Your real estate purchase contract should include a few key elements.
Identify the parties involved
Every real estate purchase contract should clearly identify the involved parties by their legal names and include current contact information.
Describe the property
A comprehensive purchase contract includes clear details of the property involved. This description should present the property address, a legal description of the plot and any appliances, fixtures or additional elements included in the sale.
Include details of the sale
The sale details include information about the purchase price, the method of payment and the buyer’s deposit details. This should also include information about deadlines for deposits, inspections and closing.
Contingencies define a buyer’s options for backing out of the deal if something falls through. Many sales include a contingency based on the home inspection results as well as the sale of the buyer’s existing home.
Address warranties, default and remedy details
Any warranties made by both parties should appear in the purchase contract. Your contract should also include information about what constitutes a default on the purchase contract and any possible remedies for the injured party in the event of a default.
Including the key elements of your contract ensures that it is comprehensive and protects both parties. Look for these sections and verify the accuracy of the information before you sign.