What's Really in a Real Estate Contract?

by Lena and Rich Benenati 05/16/2021

Image by mohamed Hassan from Pixabay

When you make an offer on a home, your real estate agent will create a real estate contract, also known as a purchase agreement. Before you sign this, you should make sure you understand it. This is a legally binding agreement, and you need to be certain you’ve made the right choice. So what’s really in a real estate contract? Here are the key points it will contain.

1. The Price

The price you are offering to pay for the home is a key point in the contract. This may or may not be what the seller listed the home for. Make sure your price reflects the current market trends and the condition of the property.

2. Important Dates

Your contract will include several important dates. These include:

Target date for the closing

Offer expiration date

Deadline for certain things, like the home inspection

Choose dates that are reasonable but that give you answers soon enough to make your own decisions about the purchase of the home.

3. Earnest Money

To show that you are serious about the offer, your contract will include earnest money. This is like a deposit on the purchase of the home, and the money will go towards the purchase at your closing. If you walk away from the home purchase without just cause, the seller can keep that earnest money

4. Contingencies

Contingencies are a major part of the contract, and often one that’s the least understood. These are the conditions you’re asking the seller to fulfill before you will proceed with the contract. Contingencies may include the inspection, any known repairs needed or any allowances you want to purchase items for the home or do repairs yourself. You can add any number of contingencies to the offer contract, but they do make the contract less appealing to the seller. That said, it’s always wise for buyers to make an offer contingent on inspection, as the inspection offers important protection.

5. Additional Details

Finally, the contract will include details about who pays for the various costs of the home sale, including the title insurance, closing costs, survey and inspections. It will also contain the details about how and when the utilities will change from the current owner to the new one if the sale moves forward.

Whether you are a buyer making an offer or a seller receiving one, take some time to have your real estate agent walk you through these components of the contract. Make sure you understand the document fully before you sign it. This will protect you from making a mistake on this serious and legally-binding agreement.

About the Author
Author

Lena and Rich Benenati

Lena and I have been helping our clients buy and sell real estate since 2002, marking over 26 years of combined market experience! We will earn your trust by utilizing proven marketing strategies, certified professional negotiating skills, and targeted technology. Add to this our local market insight and consistent follow up, and it adds up to a great experience for you! A family owned and operated business, we strive to be your trusted adviser, helping you navigate the home buying and selling processes. It is our mission to combine our extensive experience and superior customer service together with a positive attitude to ensure that you enjoy your buying or selling experience. Our customer service extends beyond the sale, providing you with useful information regularly and connecting you with the resources you need, when you need them. This is why an exceptionally high 80% of our business is referred to us by our past clients. We look forward to exceeding your expectations, in English or Spanish as you desire. Lena & Rich, a team you can trust, for everything real estate.