5 Conditions Which a Real Estate Contract Should Contain

The best thing, you can do in any type of business is to ensure that all parties and their investments are protected. This is achieved by having a solid-proof contract. The real estate industry is susceptible to fraud in many ways so it is best to consult a lawyer when it comes to contracts and legal terms. Anyway, here are 5 conditions you should have in your contract to ensure your safety.

Property Details

  A starting point in any real estate contract should be the address of a property that is going to be exchanged between the seller and the buyer. It should also contain a detailed description of the property and the following things that go with it. You need to check if they are included in the price. This is a small, but very important detail. For example, let's say you are planning to buy an apartment that is furnished, you may be led to believe that everything that you see is included in the price, but the fact is that they are charging additionally for the furniture, etc.

  It is also good to check does the property have some limitations for its usage, it can be a really stupid thing like buildings that are pet unfriendly. You bought a condo, and the building is pet unfriendly, what are you going to do? Are you going to get rid of your dog, or hide it? Really stupid thing, but it can easily happen if you don't pay attention to minor details. Also, if you are buying real estate as a sort of investment, you should be careful with the address, real states are the best way to hold value, but they have fluctuating prices, so, choose the address wisely.

Buyer and Seller Information

  Every real estate contract must contain the personal information of the buyer and seller of a property. The contract is formed of information such as name, personal address of the parties, contact phone numbers, and more. This information holds as a personal security form that ensures that the parties are known and it prevents any sort of fraud because you do have personal information, that can legally bind them if they try to fraud you in any particular way. The other way to prevent fraud from happening is to sign a pre-deal. Signatures will make the contract valid, just in case something is bound to happen.

Home Inspection

Home inspection contingency should be one of your priorities in your real estate contract. This is a very important factor to consider because it will allow you to walk away from the deal if something isn't alright. A home inspector will look for structural problems, and if there are some, he will tell you the estimated cost of repairs. This clause will save you a lot of time and money, especially if you are looking to buy real estate in a foreign market. A home inspector will also check if the real estate has all the necessary permits. Imagine, for the sake of the story that you are buying real estate in Australia. Everything has gone well, you are the owner, but you just found out that there is a permit missing and that the building dispute lawyer in Sydney has filed an appeal against you. You are facing a potential demolition and a certain penalty. So, to avoid this, always have a home inspection clause in the contract.

The Purchasing  Price

The contract will contain the purchasing price of real estate, it will also display all the offers and counter offers That led to a final negotiated price. Besides this, the contract will also state the way of payment which can be in cash, mortgage loan, or some other way That suits the buyer. There can be a deposit clause added as a way of insurance in case of the deal falls apart. If the buyer for some reason pulls out of the deal, the dealer has a right to keep deposit money as compensation for wasted time and opportunities that could have occurred if real estate was still on the market. It is always good to have a deposit clause in the contract, after all, time is money.

Closing  Cost

The final thing to look at in the real estate contract is closing cost,  it can be a potential issue. The contract itself will have a defined sentence that shows the amount of the property taxes which will become the buyer's responsibility. This is also a way to protect yourself against unplanned costs, the contract will assure fixed costs that you know in advance, before buying. Cost control is an important factor and it is important to keep good track of your money, this is a minor cost, but be careful, it can add up easily.

Guest Contributor: Mike Parsons