Real Estate Contracts Could Help Keep Transaction Terms Clear
Contracts are useful documents that can help make a variety of situations more clear. Even simple transactions could benefit from having agreements in place, and creating specific terms are often vital in significant endeavors. If you have plans to purchase a piece of real estate in the near future, you will likely be using a contract.
Because real estate transactions take place fairly regularly, you may not think it is necessary to spend much time understanding your purchase agreement. After all, you have a real estate agent or are working with other professionals who will help keep affairs in line, right? While these individuals can prove immensely helpful throughout the process, you will be able to participate more fully by understanding how a legally-binding real estate contract works for you.
Terms of the contract
Because using a contract can help protect all parties involved, you may want to closely consider the terms you want your contract to hold. You will certainly need the address of the property and the agreed-upon purchase price in the agreement, but you may also want to consider certain other terms that could help protect your interests.
One of the first aspects to consider relates to your financing options. Because you are likely not purchasing a new home in cash, you will need to take out a mortgage loan. If you have not yet obtained the loan, you may want to include terms in your purchase agreement that indicate that you can only move forward with the purchase if you obtain a certain type of loan or certain interest rates, if such factors apply to your situation.
You may also want to include terms that help ensure that the seller will stick to his or her word. For instance, when selling a home, some individuals will indicate that certain decor or appliances will remain in the home, as this incentive may make the residence more appealing. However, not everyone will keep such promises, and therefore, you may want your contract to detail what fixtures and appliances will remain in the home to prevent possible reneging.
Another important financial aspect to consider relates to closing costs. Real estate transactions are expensive endeavors, and after putting up a down payment and contending with other fees, you may feel more comfortable with your transaction if the seller handles the necessary closing costs. Of course, these costs can total thousands of dollars, and if you and the seller agree that the seller will pay these costs, you will want to have that agreement in writing.
Creating your contract
As mentioned, a real estate contract is a legally-binding agreement. Therefore, you will certainly want to ensure that the terms of your specific document are enforceable and work in your best interests. You could better ensure this outcome by working with a legal professional to draft and review your contract.
Rignanese & Associates is available to work with clients on their legal needs. Please reach out to us at 863.294.1114.
1. On behalf of Kelly Kennedy of J. Kelly Kennedy, Attorney/CPA, PLLC which has been acquired by Rignanese & Associates, PLLC.