What To Include In Real Estate Contracts
If you are looking to make a real estate purchase soon, it is important to know what to pay attention to in your contracts. With a home purchase being one of the biggest investments that you may make in your life, it is crucial that these legal documents have you fully protected. Here is a closer look at those details.
All contracts should clearly list some basic information about the parties involved. The property address, contact information for buyer and seller along with government issued ID numbers for each party. Of course the agreed upon sale price, earnest monies paid and important dates should all be recorded.
Terms and Conditions
The main part of the contract should address all terms and conditions that are associated with the home purchase. This should include things like how disputes get resolved should they arise during or after closing along with spelling out any contingencies for repairs or the like that should be completed prior to closing. Furthermore, be sure the contract states who is responsible for closing costs. These can change from deal to deal as sometimes they get negotiated during the deal.
Other than outlining the standard contractual obligations, your contracts should include contingency clauses that protect your interests in case something unexpected occurs prior to closing day. For example, it is not uncommon for buyers needing their current home sold before they can buy another one. Should this be the case then you should make sure that includes a “Sale of Buyer’s Property Contingency” clause that states you won’t be held responsible for purchasing until your current home is sold at an agreed upon price within a specific amount of time. Other standard contingencies include financing approval from banks or lenders, satisfactory home inspections, title insurance coverage being granted without issue and the like. For any questions about how to incorporate contingency clauses into your contract, work with a real estate attorney as they are the experts on using language that will protect your interests.