Once you’ve put an offer on a home, and the buyer accepts it, then it is time to draft a sales agreement. This process is complex and time consuming – and often frustrating – but it is vital to ensure every aspect of the sale is agreed upon by both parties.
Although similar to standard contracts, sales agreements have additional elements and requirements. It is important to be familiar with these aspects of real estate contracts, particularly if you do not have a realtor or the property is for sale by owner (FSBO).
Sales of real estate fall under the Statute of Frauds, which means contracts must be in writing to be valid. Additionally, real estate agreements must contain the following elements:
- Names of the parties involved in the sales transaction
- The property’s address and legal description
- Agreed upon purchase price for the property
- Signatures of all parties necessary to the sale
In addition to the elements listed above, the following can help ensure a smooth transaction for both buyer and seller:
- Transaction settlement date
- Date buyer can take possession of the property
- Names of escrow and closing agents
- Clause allowing the buyer to perform necessary property inspections
- Contingency clauses to address proper actions for certain situations, such as a buyer’s inability to finance the sale or a seller’s obligation to fix damage
- Liquidated damages clause in case the buyer’s ability to move into the house is delayed
As with any real estate matter, it also may be in your best interests to obtain advice and guidance from an experienced attorney.