If you are a home buyer in the market to purchase real estate, it is critical to be informed on what to include in a real estate purchase contract. Of course, hopefully you are working with a knowledgeable real estate agent that can guide you while explaining the essential provisions of a purchase contract. As with any contract, a real estate purchase contract is a legal document that is binding and can have huge implications not only on the transaction, but also on your finances. It is for this reason that all contracts must include certain details that ensure your rights as an owner and buyer are fully protected. We will explore some of these details below.
Basic terms of a contract
Although it may seem elementary, every contract should include basic information about the property and its owners. Some of these items are as follows:
- Full legal name of the parties or entities involved in the transaction
- Contact information for both the buyer(s) and seller(s)
- Any applicable tax identification numbers or other government-issued ID numbers associated with either party
- The total purchase price of the property along with any earnest money deposits made by either party
- Terms and conditions associated with the purchase of the property: how disputes are handled; inspection periods; loan approval periods; & who is responsible for various closing costs
- Contingency clauses: In addition to standard contract obligations, the real estate purchase will likely include contingency clauses. Most commonly, these clauses pertain to financing approval from banks or lenders, home inspections with satisfactory results, title insurance coverage being granted without issue, etc. In addition, there may be instances where the buyer needs to sell their existing property prior to purchasing the property under contract. This is also referred to as a “Sale of Buyer’s Property Contingency” clause.
As mentioned in the beginning of this article, it is imperative that both buyers and sellers are familiar with real estate contracts along with the various terms and conditions. This is where working with a knowledgeable real estate agent will not only assist you with making or saving money, but also with avoiding any costly mistakes. In addition, we always recommend that you have a real estate attorney as part of your real estate team. When you are dealing with what is likely the largest purchase in your lifetime, you can never be too prepared.
Are you in the South Florida area and looking to buy or sell real estate? Let our team of experts assist you! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download our free Florida Home Search App for your mobile device.