A contract for the sale of property is a legally enforceable document that outlines the details and obligations for the sale of a property, including the people involved, purchase price, time frame for the sale, and any exceptions, contingencies and terms of the transfer of ownership. These documents are usually blank forms written by attorneys and filled out by real estate agents. It is important to understand the implications of each part of these forms, clearly note all necessary aspects of the sale, and pay close attention to all fine print.
Writing the Contact
Fill in the blanks by naming the seller and buyer involved in the transaction and the current date. Define the property by either a clear property address or the full legal description available on the most recent deed registered with the county recorder's office.
Specify the proposed purchase price as well as any earnest money or deposit and where it will be held. It is important that clearly outlined dates are specified for when an offer must be accepted, when earnest money is due, when deposits are due, when the proposed closing will take place, and when the title needs to be delivered.
Outline any provisions, contingencies, easements and disclosures that might affect the sale. The contingencies are typically "if" statements; for example, the buyer will purchase the property if it passes a home inspection, or the buyer will purchase the property if he is able to obtain financing. You'll also need to note any easements, which are another person's right to the property. For example, a nearby homeowner may need to access a shared driveway.
Because a home sale includes many other additional expenses like property taxes and utility bills, you must clearly outline which party pays what and in what amount. Often annual bills are prorated.
Define what is and what is not included in the sale. This list generally includes light fixtures, appliances and anything that isn't clearly the seller's personal property.
Define what happens if either party fails to meet the obligations of the contract as well as the time and date of the closing and deed delivery. At the end, both parties must sign the contract to enter into the legal agreement.
Items you will need
- Property address/legal description
- Buyer(s) name(s)
- Seller(s) name(s)
- Offer price
- Earnest money deposit
- Itemized list of personal property
- List of provisions that could affect the sale
- Type of deed
- Closing date
- Contingencies with time periods
- Seller's obligation to provide clear title
- Outline of who will pay what closing costs
- Outline of adjustments on yearly/monthly bills paid/due
- Expiration date
- Because a contract is a legally binding document, it is recommended that you have an attorney fully review the document before signing.
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