What To Include In Real Estate Contracts

If you are looking to make a real estate purchase in the near future, it is important to know what to pay attention to in your contracts. A home purchase is one of the biggest investments that you may make in your life so it is crucial that these legal documents have you fully protected. Here is a closer look at some important details.

The Contract Basics

Every contract should clearly list the basic information about the parties involved. This includes the property address, contact information for buyer and seller along with government issued ID numbers for each party. Other important items include the agreed upon sale price, earnest monies paid and event dates should all be recorded.

Terms and Conditions

The main part of the contract should speak to all terms and conditions that are associated with the home purchase. This should include things like how disputes get resolved should they occur during or after closing along with addressing any contingencies for repairs or the like that should be completed prior to closing. Additionally, make sure the contract states who is responsible for closing costs as this can change from deal to deal as sometimes they get negotiated during the deal. 

Contingencies

Other than outlining the basic contractual obligations, your contracts should include any 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 the next one. If this is the case then you should make sure that includes a “Sale of Buyer’s Property Contingency” clause that says you won’t be held responsible for purchasing until your current home is sold at an agreed upon price within a defined period of time. Other standard contingencies include financing approval from lenders, satisfactory home inspections, title insurance coverage being granted without issue and the like. If you have any questions about how to incorporate contingency clauses into your contract, consult with a real estate attorney as only they are the experts on using language that will protect your interests.