Components Of A Real Estate Contract Template You Must Never Miss
It could be surmised that real estate professionals know the basics of a real estate contract template like the back of their hand. After all, no transaction occurs without the said contract involved.
A real estate purchase agreement or real estate purchase contract is a written agreement created when a person/party buys/sells real estate from another person/party. Of course, there are other more detailed definitions of real estate contract – a shorter term for this document – but that’s basically what it is.
Whether you’re a real estate professional – realtor, broker, or real estate agent – or a homebuyer, knowledge about a real estate contract template will make dealings easier for you.
Contracts for the Sale of Real Estate
COPYRIGHT_FT: Published on https://free-template.co/real-estate-contract-template/ by Steve Martins on 2021-12-27T06:52:48.176Z
In the U.S., a sample real estate contract template starts with mention of the state where the property being sold is located. It is followed by the names and physical addresses of the parties (buyer and seller) involved.
What comes next are the different sections – and there are several – that’s why a real estate contract is usually more than 10 pages long.
The typical sections are: (1) Property, (2) Personal Property, (3) Purchase Price, (4) Disclosures, (5) Assumption of Loan, (6) Financing Contingency, (7) Sale of Another Property Contingency, (8) Seller Representations and Warranties, (9) Inspection, (10) Title Insurance.
Next: (11) Closing, (12) Seller Closing Deliverables, (13) Buyer Closing Deliverables, (14) Seller Closing Costs, (15) Buyer Closing Costs, (16) Delayed Closing, (17) Risk of Loss, (18) Possession of the Property, (19) Assumption of Leases, (20) Buyer’s Lien.
Then: (21) Condition of Property, (22) Sex Offender Registry Notice, (23) Real Estate Taxes, (24) Default, (25) Acceptance of Deed, (26) Bankruptcy, (27) Attorney’s Fees, (28) Governing Law, (29) Disputes, (30) Notices.
Finally: (31) Assignment, (32) Amendment, (33) Waiver, (34) Binding Effect, (35) Counterparts (36) Severability, (37) Headings, (38) Entire Agreement, (39) Miscellaneous.
Below “Miscellaneous” will be the space intended for the names and signatures of the parties involved.
It will be followed by the state’s Required Disclosures, Buyer’s Acknowledgment, Agent’s Acknowledgment, and Certification of Accuracy (where the parties will again indicate their names, sign the contract, and write the date they signed it).
It seems more people are looking online for a sample real estate contract template for Virginia, a state located in the southeastern part of the U.S.
In her article for Virginia REALTORS, where she works as its chief economist, Lisa Sturtevant, Ph.D., described Virginia’s housing market as “hot” as of August 2021. Dr. Sturtevant admitted she wasn’t even sure if the more fitting description should be “frenzied” or “on fire.”
A real estate purchase agreement in the U.S. varies depending on the state, including the required disclosures. Below are the contents of a real estate contract template by Virginia REALTORS.
It also begins with the same information included in a basic real estate contract template (as mentioned in the previous section), albeit with different wordings. Also, the section headings and related contents will be different.
The sections are: (1) Real Property, (2) Personal Property, (3) Purchase Price, (4) Deposit, (5) Financing (6) VA/FHA Loan, (7) Loan Fees, (8) Title Insurance, (9) Settlement; Possession, (10) Expenses; Prorations; Rollback Taxes.
Next: (11) Brokerage Fee; Settlement Statements, (12) Broker Indemnification, (13) Risk of Loss, (14) Wood Infestation Inspection and Report, (15) Title, (16) Equipment Condition and Inspection, (17) Well and Septic, (18) Seller’s and Purchaser’s Option, (19) Home Purchaser’s Inspection, (20) Notice to the Purchaser Regarding Settlement Agent and Settlement Services.
Then: (21) Mechanics Lien Notice, (22) Condominium Disclosure, (23) Property Owner’s Association Disclosure, (24) Lead-based Paint Inspection, (25) Notice to Purchaser(s), (26) Notice of Disclosure Pursuant to Virginia Residential Property Disclosure Act, (27) Default, (28) Miscellaneous, (29) Non-binding Mediation, (30) Brokers: Licensee Status.
Finally: (31) Other Terms, (32) Acceptance, (33) Electronic Signatures.
For information purposes only, the name, address, contact information, and other information (e.g., Agent license number) of the selling and listing companies will come after the signatures.
Then the “Date of Ratification” followed by the signature of the selling and listing companies as acknowledgement of the stated ratification date.
In addition, when writing a real property contract template for Virginia, include the disclosures mandated by the state law. Virginia has seven required disclosures, namely, Building Code or Zoning Ordinance Violations Disclosure, Lead-Based Paint Disclosure, Methamphetamine Disclosure, Military Air Installation Disclosure, New Dwelling Disclosure, Residential Property Disclosure Statement, and Septic System Disclosure.
Depending on the complexity of the requirements as well as on the manner of selling, it will be best to leave the writing to a real estate agent.
That’s one piece of advice from Australian real estate company LJ Hooker, particularly if the owner/seller decided to sell the property privately.
LJ Hooker affirmed the importance of transacting with licensed real estate professionals because they know what to include in a real estate contract template.
Law dictates that a real estate contract must meet seven basic requirements to establish its validity, according to Wise Property Management, a Florida-based property management company.
First, the contract must be put into writing; As a follow up, one party must make an offer to another party and that party must accept the said offer.
Second, its purpose must be legal and that both parties express their mutual agreement on everything stated in the contract.
Third, it must state the names of all the people/parties involved in the transaction.
Fourth, it must state the property being sold, which should include its physical address.
Fifth, it must specify the price or amount agreed by both parties to be paid for the property.
Sixth, it must mention provision for consideration, a common form of which is money.
Lastly, the contract must show the signatures of all the parties involved and mentioned in it.
Purchasing real estate involves a huge sum of money and effort, and having the correct real property contract template is vital to ensure a successful transaction.
With each state having its own laws, guidelines, and required disclosures for a real estate purchase agreement, it would be wise to heed LJ Hooker’s advice.
Let real estate professionals deal with the real property contract template because homebuyers should be busy making their new home comfortable, not worrying about legal problems.