By Emma Sturgis
If you’re in the market for real estate, it’s essential to know what to look for when it comes to contracts. After all, these legal documents are binding and can have a huge impact on your purchase. Your contract should include certain details that ensure your rights as an owner and buyer are fully protected. Let’s take a look at what those specifics are.
The Basics of a Contract
Every real estate contract should include basic information about the property and its owners. This includes the address of the property, contact information for both the seller and buyer, and any applicable tax identification numbers or other government-issued ID numbers associated with either party. The total sale price should also be listed in the contract, as well as any earnest money deposits made by either party.
Contract Terms and Conditions
The body of the contract should also include terms and conditions associated with the purchase. These may vary from state to state, so it’s important to make sure you understand them before signing on the dotted line. Generally speaking, these terms will outline how disputes will be handled if they arise during or after closing, as well as any contingencies that must be met prior to closing such as repair or inspection requirements. Additionally, you’ll want to pay close attention to who is responsible for paying closing costs – this can vary depending on local custom or negotiation between buyers and sellers.
In addition to outlining standard contractual obligations, your real estate contracts should include contingency clauses that protect your interests in case something unexpected occurs prior to closing day. For instance, some buyers may need their current home sold before they can buy another one; if this is true in your case then you should make sure that includes a “Sale of Buyer’s Property Contingency” clause that states you won’t be held liable for purchasing unless/until your current home is sold at an agreed upon price within a specific time frame. Other common contingencies involve financing approval from banks or lenders, home inspections with satisfactory results, title insurance coverage being granted without issue, etc. If you have questions about how to incorporate contingency clauses into your contract, work with a real estate attorney.
It's important for buyers (and sellers) alike to familiarize themselves with real estate contracts before making any commitments or signing anything legally binding; this way everyone involved understands their rights and responsibilities throughout the process of buying or selling property. Be sure that all of the items we discussed above are included in yours—from basic information about ownership and sale prices down through all applicable clauses covering contingencies—so that you're fully protected when it comes time to close on your new home!
Emma Sturgis is a freelance writer based out of Boston, Massachusetts. She writes most often on health and education. When not writing, she enjoys reading and watching film noir. Say hi on Twitter @EmmaSturgis2