What should you include in your real estate purchase contract?

On Behalf of | Jun 4, 2019 | residential real estate | 0 comments

Gone are the days when a simple handshake and the exchange of monies could seal a deal. Therefore, you must have valid purchase contracts when buying or selling a residential property in Florida. In order to help protect both the buyer and the seller, there are certain key provisions that your purchase contract should include.

First and foremost, the purchase contracts for residential real estate should identify the property’s buyer and seller, as well as the agreed-upon sale price. Additionally, it should include a description of the property, including its condition, and specify how it is to be sold. For example, whether it is being sold as is or if certain repairs are required before the sale can be finalized. Included in the description should also be which appliances and fixtures are included in the sale and which are not.

According to Realtor.com, sometimes there are things they buyer or seller must do before a real estate transaction can go forward. This may include obtaining a mortgage approval, a home appraisal or a home inspection. Your purchase contract should include a provision specifying these contingencies, as well as the deadlines by which they must be met.

The settlement date, or closing date, is the day when the sale becomes official. Typically negotiated between the buyer and seller, if the contingencies are not resolved by this day, you could be in default of the contract and at risk of losing your deposit.

Earnest money is a deposit that a buyer makes to the property seller. This money is typically held by the title company or the seller’s broker to be applied toward the down payment and closing costs on the purchase. In addition to specifying the amount of the deposit, the earnest money provision in your purchase contract should specify the reasons or contingencies under which you may be entitled to get your earnest money back should the transaction not go through.

This post’s information is intended only for general purposes and should not be considered as legal advice.