A concise, well-written purchase contract is an invaluable part of closing the deal on all homes for sale, for both the buyer and seller. These legal, binding documents identify the exact parcel of property being sold, as well all the agreed upon terms and conditions of the sale. Prepared by either a licensed real estate professional or an attorney, real estate purchase contracts provide a game plan for the entire sale process, from initial offer through the closing and transfer of ownership. If you are planning to buy or sell a home or other piece of real estate in the near future, the following information can help you more fully understand and utilize this document.
What is included in a real estate purchase contract?
While the exact wording of a real estate purchase contract can vary from state to state, depending on local laws and customs, all will contain the following information:
- a legal description and address for the real estate being sold
- the names of all parties involved
- financial information, including the agreed upon purchase price of the property, earnest deposit information, how the property will be paid for, the amount of the closing costs and sales commission and who will pay these costs
- any contingencies, special conditions, or exceptions to the sale
- important dates, such as time frames for inspections, loan approvals, appraisals, and closings
- details about how possession will be given and when
- legal signatures of all parties to the agreement, including buyer or buyers, seller or sellers, and real estate professionals
With today's real estate transactions becoming increasingly complex, the real estate purchase contract helps to protect the interests of all parties and ensure an smooth transfer of property from one party to the other.
Can a real estate purchase contract be broken?
While the short answer is yes, breaking a real estate purchase contract is a serious matter than should be avoided, whenever possible. Depending on how the purchase contract was worded and the laws in the area where the contract was made, buyers or sellers who break their contract to purchase can face legal action or the loss of funds, such as the earnest money deposit.
To learn more about real estate purchase contracts and how they can protect your interests when buying or selling a home, consider contacting a trusted real estate professional in your area. They will be able to show you sample documents and more fully explain each one. Doing this will help you become more prepared to take the next step in buying or selling a home.