Selling a home or other piece of real estate is often the largest transaction of our lives. These deals can run in the hundreds of thousands and can reach millions. When navigating these transactions, it is important to have a clear understanding of everyone’s obligations. A properly drafted real estate contract can help to achieve this goal.
What should I include in a real estate contract?
The exact provisions vary depending on the property, but some common examples include:
- Price. It is beneficial for both parties to specify the cost of property. Buyers are often wise to include financing details as well.
- Who pays what. Closing costs are one part of this discussion. These expenses can include escrow fees, the cost of title search and insurance, as well as any transfer taxes or fees.
- Contingencies. This portion refers to all the other things that could impact the sale. A common example is a home inspection. Others can include a desire to keep a swing set or other items that may be viewed as fixtures and appliances. Clearly including this within the contract reduces the risk of surprise for either party when the deal is coming to a close.
These are just a few examples and serve as a starting point for a much larger discussion when drafting these documents.
What if the buyer backs out?
There are times when a buyer backs out of an agreement. Although the exact remedies will vary depending on the details of the contract, in many cases, state law allows a seller to hold a buyer who backs out of a real estate contract accountable for monetary damages.
