Real Estate Sales Contracts And What To Look For

The first thing to clearly understand when signing a real estate sales contract, is that IT IS A CONTRACT, and not just an offer to buy. You are signing a a legal contract.

Most sales contracts will have some paraphrase of the following: "This is a legally binding contract. If not understood, seek competent advice before signing."

IMPORTANT: This real estate blog does NOT purport to give any kind of legal or financial advice. So, tread carefully and seek your own professional legal and/or financial advice.

There are common things to look for in a real estate sales contract although they may vary depending on where you live. Generally however, most real estate contracts will include some of the following aspects:

1. A legal description of the property as well as the street address.

2. The selling price.

3. Deposit details. How much money accompanies the contract and who will hold it.

4. Acceptance. How long the sellers have to respond to the offer by either declining, accepting or returning with a counter-offer.

5. Possession Date. The exact time and date when the buyers take possession of the property either before, at or after closing.

6. A mortgage contingency. The contract being subject to the purchaser obtaining a mortgage (if applicable). It could include specifics of the mortgage such as the amount, rate and term. The specified number of days in which the application is to be made.

7. Inclusions and exclusions. A list of what is and is not included in the sale of the property.

8. Provision for a home inspection. Contingency for and to be done in a specified number of days.

9. Warranties Details of any warranties that are included with the house.

10. Provision for a termite and pest inspection being undertaken along with details on who will pay and if there is infestation or damage and who will arrange the repair.

11. Arbitration provisions in case of disputes.

12. Closing details. When and where.

13. Insurance. Who is responsible for insuring the property up until the closing date.

14. Property Disclosures. Notices of any property disclosures concerning the house.

The contract could also include other clauses like special provisions relating to condominiums etc.

This is a guide only and the list is by no means complete. Contracts will vary depending on where you are located and on the nature of the transaction, which is precisely why you should always seek professional legal advice before signing any legally binding real estate contract.

Click here before your signing a real estate contract.