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The Real Property The terms and conditions of every real property sale and purchase transaction are determined by the real property purchase contract. In the contract, the seller agrees to sell and a buyer agrees to buy real property pursuant to the contract´s provisions. Generally, the seller and the buyer accept those provisions by signing the contract in the acceptance section (or when the last of any counter-offers has been signed by the receiving party without any changes and a signed copy of that counter-offer is received by the issuing party). When both parties have accepted the contract, the contract becomes a legal binding document and creates obligations on the part of both parties to act and perform in the manner specified in the document. A common misconception is that any standard real property purchase contract will work in every situation. In fact, nothing could be farther from the truth. Purchase contracts are often developed for a particular market area and may not be appropriate for use outside that market area. But most standard real property purchase contracts are adaptable and sellers and buyers may add, modify or delete any provision they wish. However, any additions, modifications or deletions must be lawful, agreed upon and signed by both parties. Although real property purchase contracts can vary widely, most commonly used forms of agreement contain sections dealing with the following subjects: • The names of the parties to the contract; • A description of the property; • The amount of the purchase price; • The amounts of the deposit and the down payment; • The method of payment; • The escrow holder and its location; • Financing terms, if any; • Obtaining a title report and insurance; • Fixtures (included and excluded); • Personal property (included and excluded); • Physical and geological inspections; • Inspection, financing and other conditions of performance that must be satisfied within a specified period of time to avoid termination of the contract (commonly referred to as "contingencies"); • Warranties and any exceptions; • The closing date; and • Physical possession. It is essential that every buyer and every seller carefully read any contract pertaining to the sale and purchase of real property in its entirety and understand the obligations that are being assumed before accepting its provisions by signing it. The above is provided for informational purposes only to provide buyers and sellers of residential real property with basic, general information about real property sale and purchase contracts. It should be viewed as a starting point only. It is not intended to be a complete summary of important information regarding purchase contracts. Buyers and sellers are urged to consult with a qualified real estate attorney if they desire any legal advice or have any questions, such as whether a particular contract is appropriate for use in a specific transaction. A real estate broker or agent (referred to in this document as a "real estate broker" or "broker") can advise on real estate transactions only and is not qualified to give legal advice or answer questions concerning matters of law. |