What is a Real Estate Purchase Contract?
A real estate contract is a legally binding document between two parties or collective parties for the purchase, sale, exchange or other conveyance
of real property. Real estate purchase contracts are used in almost every real estate transaction whether they are private parties or parties working
with a real estate agency. The purpose of the real estate contract is to provide a written agreement between the parties indicating the intent to sell or buy
the real property. The contract is important because it contains several provisions which outline what must be done in order to satisfy both parties
to allow the deal to go through. For example, the contract may contain a clause that allows the potential buyer to have the property thoroughly inspected
prior to the closing. If the inspector finds issues with the property, the buyer can ask to have the issues resolved, or back out of the deal without
any recourse. Without a written agreement between both parties, these types of understandings often go forgotten or can be mis-interpreted leading
to unnecessary legal issues down the road.
What's in the Real Estate Purchase Contract ("REPC")?
Our REPC has you covered. We nail down all the essentials such as buyers' and sellers' names, purchase price,
legal description of the property,
closing date, standard and custom contingencies, earnest money deposit and choice of deed. We also offer optional provisions for unique situations
like a seller-financed purchase and we even give you the option to fully customize your agreement by inserting your own special provisions.
Depending on which provisions you select to include in your agreement, your real estate purchase agreement delivers 7-8 pages' worth
of solid legal protection to guide both buyer and seller through to a perfect closing!
Click here to start building your customized, signature ready real estate purchase contract now!
Closing:
In real estate sales, the "Closing" has traditionally meant the time and day when the buyer and seller sign all the final documents such as loan payoffs, deeds, and other final administrative matters to completely consummate the transaction and transfer ownership. The Closing is usually held at a title or escrow company, although this is not required.
Remember, simply signing a Real Estate Purchase Contract ("REPC") is usually just the beginning of the process of transferring real property from one person to another. The REPC is an agreement between the parties that establishes a framework within which the parties can move in an orderly fashion toward the Closing. For example, the REPC sets forth dates by which the seller must make certain disclosures, the dates by which the buyer must obtain an inspection or financing, and other administrative matters before the property is actually transferred. The REPC also establishes the remedies available to each party if the other doesn't do what it agreed to.
Contingencies:
A contingency in a contract means there is some condition that must be met before the purchase goes all the way through to closing. For example, a loan contingency in a real estate purchase contract usually means that even though the buyer and sell have signed the contract, the buyer won't be required to go through with the purchase if he or she is unable to qualify for a loan.
Purchase Price:
The purchase price is the total amount the buyer will pay the seller for the property. The purchase price does not include any closing costs or third party fees.
Legal Description of the Property:
The legal description of the property is how the property is formally identified in governmental records such as those at the county recorder's or assessor's office. You can obtain the legal description of the property by reading it from the deed. If you don't have a copy of the deed handy, you can usually get a copy by calling the county recorder's office where the property is situated and telling the clerk the street address or current owner of the property. Often the clerk will simply read the legal description to you right over the phone if the description isn't too long. Still, it's always best to verify the legal description by double checking it against what is written on the deed.
If you have a copy of the deed, you may also see a tax identification or parcel number just above or below the legal description. It's helpful to include that number along with the legal description because using that number is an easy way to look up the property in county records.
The legal description is also sometimes called the "metes and bounds" description. The legal description is NOT the same as the street address.
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