And when you do, you’ll sign a real estate purchase contract – but what’s in this type of contract, and what does it cover? Here’s what you need to know.
What is a Real Estate Purchase Contract?
A real estate purchase contract, which is also called a residential purchase agreement (or simply a real estate contract), is a binding and bilateral agreement between parties. The contract is based on consideration, which means that something is exchanged for the real estate.
A real estate purchase contract must be in writing in order for a court to be able to enforce it, and both parties must sign it.
What’s in a Real Estate Purchase Contract?
Every purchase is different when it comes to contingencies (conditions that must be met in order for the buyer and seller to complete the transaction), but they all contain:
- The parties’ identifications
- Details on the real estate property
- The agreed-upon purchase price
- The rights and obligations of each party under the contract
- The property’s condition
- What stays and what is not included with the purchase of the property
- How much earnest money the buyer put down
- Details on closing costs and who is responsible for them.
- The closing date
- Each party’s signature
- Terms of possession
What Are Contingencies?
Contingencies are “emergency exits” in a real estate purchase contract. They allow the buyer or seller to leave the contract with his or her earnest money deposit intact. Some of the most common contingencies include:
- Financing contingencies
- Appraisal contingencies
- Inspection contingencies
Your real estate purchase contract will most likely include a financing contingency. This condition says that if the buyer can’t get financing to buy the house within a certain time frame, he or she doesn’t have to go through with the transaction.
The buyer’s lender will require an appraisal of the property to make sure it’s worth the money the buyer wants to borrow. If it’s not, the lender will most likely refuse to finance unless the buyer comes up with a larger down payment or another appraisal shows that the first was wrong. When an appraisal comes in below the home’s listed price, this contingency allows both parties to back out of the deal.
A home inspection contingency gives a buyer the right to have the home inspected within a certain timeframe. The buyer can also use the inspector’s findings to cancel the contract or negotiate repairs. Typically, the buyer pays for this inspection.
Do You Need to Talk to an Orlando Real Estate Expert?
If you’re buying a home in Orlando or any of its suburbs, we can help you find the one that’s right for you.
Check out our:
- Homes for sale in Alaqua Country Club
- Homes for sale at Bay Hill Club
- Country Club of Orlando homes for sale
- Homes for sale at Keenes Pointe Golf Club
- Isleworth Country Club homes for sale
- Sweetwater Golf and Country Club homes for sale
- Homes for sale at Heathrow and Legacy Clubs
We’ll be happy to show you homes in Orlando and the surrounding communities, so when you’re ready to explore your options, call us at 407-529-4621 or contact us online to tell us what you’re looking for. We’ll help you find it.