Real Estate Contracts

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Since real property involves a considerable amount of money, it has been standard practice to draw up a contract that will formalize all agreements. These contracts which involve real property are referred alternatively as lease contract, rental contracts or contract of sale.

Real estate contracts are legal contracts between two parties involving either purchase of lease of a real property. In the United States, these real estate contracts are only valid if it is in writing. Real estate contracts contain valuable information pertaining to the purchase of the property as well as standard provision or limitations.

A standard real estate contract usually contain the following: information on the parties involved, details of the property to be purchased, price of the property and signatures to legalize the contract.

The information on the parties involved includes the buyer and the seller’s legal name. They are also referred to as the principals. This distinction is used to avoid confusion when real estate agents are involved. Parties involved should be considered competent, of legal age and must enter into the real estate contract voluntarily. Signatures are required to prove that both parties understand and accept all the obligations of the real estate contract.

The property to be purchased, on the other hand, should be described in detail and includes its location. The purchase price should be included as well since this amount is what the buyer agreed to pay. Sometimes, a real estate contract is facilitated by a real estate broker making it easier for both parties.

Keep in mind that real estate contracts are still separate from deeds. These deeds convey ownership of the property unlike real estate contracts. Types of deed include warranty deed or a quitclaim deed.

Another important feature of real estate contracts is the list of contingencies. Most of the time, contingencies are put into place in cases of suspension or cancellation of the contract. Other contingencies commonly found in real estate contracts are mortgage contingency, inspection contingency, another sale contingency, appraisal contingency and 72-hour kick out contingency.

Lastly, the real estate contract should contain a closing date which will mark the time for the buyer to make the full payment in order for him to have complete possession of the real property.

Real estate contracts should be entered into responsibly and objectively. If you need the service of excellent real estate agents, Foreclosure Listings can provide assistance immediately. With extensive experience and solid reputation, they can guarantee real estate contracts that are well-prepared.