Looking At The Details Of Real Estate Contracts
The real estate attorneys at Goldman, Monaghan, Thakkar & Bettin, P.A. have extensive experience in handling the purchase and sale of commercial and residential real estate. From the time an offer is made until the closing, our attorneys will provide you with expert legal advice and representation.
The purchase of your home, investment, or commercial property is a significant financial and emotional investment for you, your family, and your future. It is our responsibility as real estate attorneys to explain to you the legal consequences of what you are being asked to sign. Just because it is a “form contract” or you are told the terms are “standard” or “nothing to worry about” does not necessarily mean that it is in your best interests to sign. The buyer, seller, and realtor all have different and often competing legal and financial interests in the closing. For example, while there may be a “standard” allocation of closing costs, is it in your best interest to agree or negotiate different terms? As your attorney, we represent only you in negotiating the most favorable terms of your contract.
The Real Estate Contract
A real estate contract, also known as a purchase and sale agreement, is a legally binding agreement between the buyer and seller. The purpose of a real estate purchase and sale agreement is to clearly express the terms and conditions of the sale between the parties.
A typical real estate contract includes the following provisions:
- Writing- A contract for the purchase and sale of real estate must generally be in writing to be enforceable.
- Identification of the Parties- The contract must specifically identify the parties to the contract, the buyer and seller.
- Identification of the Real Property- The contract must identify the real property. A legal description and street address should be used to clearly and unambiguously identify the property.
- Identification of Personal Property- For residential contracts, this typically includes stove, range, refrigerator, window treatments, etc. For commercial contracts, office equipment, inventory, or manufacturing equipment.
- Purchase Price-The contract must state the purchase price of the property or a reasonably ascertainable figure.
- Closing Date- When will the title be transferred and money be exchanging hands?
- Signatures- A contract must be signed by the parties to be deemed enforceable. The party signing the contract must be of legal age and sound mind. In the case of a business entity, an authorized person must sign on behalf of the company.
Important Considerations When Drafting The Real Estate Contract
An “As Is” contract generally deletes the seller’s obligation to make repairs for items that are not in working condition and for existing, apparent damages to the premises. The terms and conditions of the contract usually require the buyer to perform any inspections and pursue any due diligence they deem necessary to fully understand the condition of the property.
A seller is required to provide evidence of good and marketable title. Marketable title is title that is free and clear of any and all objectionable liens or other title defects.
As a buyer you should always order home inspections, roof, plumbing, electrical, air conditioning, and termite inspections. If a commercial contract, the condition of the equipment should also be determined. Results of inspections need to be conveyed to the seller so that repairs can be made in accordance with the contract’s requirements. Failure to convey the results to the seller may constitute a waiver of any repairs by the buyer.
Homeowners’ Association and Condominium Association Documents
If applicable to the property, the seller should deliver a copy of the Homeowners’ Association documents or the Condominium Association documents to the buyer. In addition to the association’s documents, a buyer should also receive the appropriate documents that identify any annual and monthly fees to be paid and how often they are to be paid.
- Third party financing is the most common way to purchase a property. A bank or other lending institution provides a loan to the buyer for the purchase of the property.
- Seller financing is when a seller provides financing to a buyer in lieu of a loan from a third party lender.
- No financing is required when a buyer is purchasing the property in full using their own funds. This is also called a “cash” closing.
Closing Costs Explained
Closing costs are fees paid at the conclusion of a real estate transaction, typically known as the closing. The closing is when title to the property is conveyed to the buyer.
Closing costs that are typically paid by the buyer include, but are not limited to the following:
- Stamp Tax on Mortgage;
- Intangible Tax on Mortgage;
- Recording Fees;
- Lender Origination Fees;
- Appraisal Fees;
- Recording Fees for Deed;
- Inspections Costs;
- Buyer’s Attorneys’ Fees and Costs.
Closing costs that are paid by the seller include, but are not limited to the following:
- Recording Fees;
- Title Search Charges;
- Documentary Stamp Taxes on Deed;
- Homeowners’ Association/Condominium Association Estoppel Fees;
- Seller’s Attorneys’ Fees and Costs;
- Seller’s Realtor’s Commission Fee.
The experienced attorneys at Goldman, Monaghan, Thakkar & Bettin, P.A. have provided knowledgeable and dependable representation to buyers and sellers in real estate transactions since 1984. Our attorneys will be able to handle all aspects of buying or selling real estate. The real estate contract is the first step in the closing process. Start off on the right foot. Contact us online, or call our real estate attorneys at 321-353-7625.