5 things that should contain the real estate contract
Updated: Jun 25, 2020
The sale of property is accompanied by several crucial moments – from the marketing, through vewing tours to the much anticipated final OK with a serious bidder. And then comes the signature of the real estate contract. However, if you do not know what this document must contain, you may easily stumble as a seller.
While I will advise you in this article on what must the real estate contract have, it is still true that the creation of a real estate contract (or at least its check) belongs to a legal counsil. Remember that this is a big thing and deserves a much more consistent procedure than simple downloading a template from the Internet... Now let's look at the individual points.
1. Clearly and clearly: who sells and who buys The contract must not, of course, lack data on the parties concerned. Beware of completeness and up-to-dateness of information: full name and surname, birth number and permanent address. If the situation so requires, a contact/mailing address should also be mentioned. The company should also has its name, registered address and identification number.
2. What and for how much Also make sure you specify the subject of the contract and its price. It must be clear, without doubt, what is being sold for what amount. The way of description and definition of the property is based on the new Civil Code 2014. Don't miss anything, get into details. It will protect you from the possible complications in the future.
It is aso important to metion here the statement that the property has no legal defects that would restrict ownership, for example, assents of executor, property equity loan and various debts. If this is not the case, I strongly recommend to first resolve such legal defects before trying to sell the property. Alternatevely you should notify the interested party about it and work with the legal counsil on resolution.
As for the price, it is required to specify how much is the property itself and for how much you sell the equipment. Therefore, it should be two separate items. Also, at this point clarify with the buyer to what part he will use his own funds and what will be covered by the mortgage loan, if any.
3. Payment Process The real estate contract also includes details on how and when the money will be transferred. I assume you have used escrow account to avoid problems and arguments, so it's only a matter of reiterating the information from the escrow agreement. The payment method shall be identical.
4. Careful definition of possible problems, solutions and penalties Never omit the part that deals with potential difficulties – when the counterparty fails to comply with one of the points. Financial part is the most pressing topic for you as the seller. Therefore, be sure to discuss what will follow if the terms are violated. Also, you clarify what happens when someone defaults at the last minute. But be careful, keep in mind the situations in which the authorities may interfere. It may happen that cadastral office does not approve change of boundries or will want additional documents.
5. When the official handover occurs Last but not least, keep in mind the deadline. Many people believe that the seller and buyer "will somehow automatically" hand over the property, but it may not be the case. You should agree on everything in details, mention it in the contract and follow the terms.
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