Real estate purchase is probably one of the most important transactions you can ever undertake. Right from the shopping to the day you are handed your keys, it is crucial that you understand the legal requirements of closing a real estate deal, as well as your rights and responsibilities as a buyer.
One of the most important documents in the real estate transaction process is the purchase contract or agreement. A good purchase contract covers every element of the sale process, thus ensuring that both parties understand their roles in the transaction.
Here are three essential components of a real estate contract.
Identities of the parties to the contract
First and foremost, the purchase agreement must indicate the property in question. It must indicate the exact address as well as the property’s legal description. Next, it must indicate the identities of the buyer and the seller. And if there is more than one buyer involved, the contract must indicate the nature of the tenancy. Are they going to be joint or common tenants?
Property price and terms
The purchase contract must also indicate the property’s selling price as accepted by the seller as well as the payment terms. This can be in the form of cash payment or a mortgage plan.
Closing date and terms
The property’s closing date should also be clearly stated in the purchase agreement. Additionally, there must be a clause indicating that any changes in closing will have to be communicated in writing. Alongside the closing date, the document must also indicate the closing cost. The closing cost – and who is responsible for it – varies from property to property. The closing cost can be paid by the buyer or split between the buyer and the seller.
Real estate transactions can seem overwhelming to first-timers and repeat buyers as well. A watertight real estate purchase contract can help you safeguard your interests and ensure that the process is as hassle-free as possible.
