Writing a real estate contract is one of the most essential parts of any real estate transaction. And yet, people will gladly sign the terms of a real estate contract without understanding what it means for them. For buyers and sellers alike, the contract can impose a number of legal responsibilities that can cost valuable time and money, but they can also help to protect either side of the transaction from potential problems. Here are five things you should look for in your real estate contract:
- Given the cost involved in most real estate transactions, there are very few people who purchase real estate with cash. Instead, they seek financing from a mortgage lender, who pays for the cost of the house in exchange for installment payments over a set period. Given this reality, it is common for sellers to put a term in the contract that requires approval for pre-financing, which helps ensure the transaction will be paid for.
- You never really know what might be wrong with a property until you give it a proper inspection. That is why it is common for buyers to put a requirement for inspections into their real estate contract, which can help identify potential issues that could complicate the sale of the property. These requirements also typically specify who bears the responsibility for paying for those inspections, and what may happen if any issues are identified.
Fixtures and appliances
- Another important issue to argue over is whether any furniture or appliances will be sold along with the property. After all, if the seller intends to take all of the furniture and appliances with them when they leave, that means the buyer must bring or buy their own when they move in. This can become a potential point of contention if it is not worked out in the real estate contract itself.
Closing costs and requirements
- Chronologically, the last thing to happen in any real estate transaction is closing, when all the last pieces of paperwork are signed and all the closing costs are paid. But one thing that can become a point of contention is who is responsible for which closing costs, and what things will be required for closing to go forward. A real estate contract can clarify these responsibilities for both the buyer and the seller, avoiding potential problems later on.
- Any real estate contract comes with a lot of potential problems that could arise at any point during the transaction. Inspections could reveal a serious structural defect in the building, or a title search might reveal an undisclosed lien on the property. A real estate contract can set up potential contingencies that lay out what happens in the event of these unfortunate occurrences.
The law office of Georgaklis & Mallas PLLC is experienced in various areas of real estate-related transactions. The firm’s skilled attorneys handle both commercial and residential transactions on behalf of lending institutions, real estate investment and management companies, business and individual clients. Call (718) 238-2400 for more information or to schedule a consultation.