The Purchase Contract
The purchase contract is the legally binding document that sets forth
the terms of the sale, establishes the rights and obligations of the
parties involved, specifies the actions to be taken in order to close
the sale,
and establishes the time frames for those steps to be completed.
A contract is created
when there is a "meeting of the minds" on all terms. The contract is
created when the buyer and seller have come to such agreement and signed
the offer form along with any counter-offers and addenda. Real estate
contracts must be in writing; verbal contracts to purchase real estate
cannot be enforced. Prior to signing a contract to buy or sell real
property it is important to understand all of the terms to which you
may be obligating yourself.
Typically standard
pre-printed purchase contract forms are utilized and filled out by the
real estate agents handling the transaction or by the principals if
there is no agent involved. While most buyers and sellers are usually
fully aware of the terms such as price, closing date, and financial
terms, there is tendency to overlook much of the pre-printed portion
of the form. Since all the terms of the contract can be binding it is
important to understand all of the terms that you are agreeing to before
you sign the contract. Not doing so can be a costly mistake, especially
if there are problems or difficulties in the transaction.
Some of the items
that you may be agreeing to when you sign the pre-printed form may include:
