THE PURCHASE CONTRACT
Most real estate agents use standard pre-printed purchase contract forms, filling in the details specific to your purchase terms. These legally binding documents are used to:
Set forth the terms of the sale.
Establish the rights and obligations of the parties involved.
Specify what actions will be taken in order to close the sale.
Establish time frames for those steps to be completed.
While most buyers are usually fully aware of terms regarding price, closing date, and financial arrangements, there is a tendency to overlook much of the rest of the contract. However, since all the contract terms will be binding, it is important to understand what you are agreeing to before signing the contract. Not doing so can be a costly mistake, especially if there are problems or difficulties in the transaction.
A purchase contract is created when there is a “meeting of the minds” on all terms—when you and the seller have come to an agreement and signed the offer form along with any counteroffers and addenda. Real estate contracts must be in writing; verbal contracts to purchase real estate cannot be enforced.
Some of the items that you may be agreeing to may include:
What personal property will be included or excluded from the sale.
Who will pay for required repairs or retrofits.
What the seller’s disclosure obligations will be.
What the seller’s obligation to maintain the property will be.
What the seller is warranting about the property.
What the buyer’s inspection rights will be.
What will happen in the event either party does not comply with the contract.
Whether or not the buyer can get out of the contract upon an attorney review and/or other contingencies.
What will the parties’ legal rights and attorney fee provisions be in the event of a breach of contract.
It is highly recommended that you read and review the pre-printed forms with your buyer’s representative before you write and sign a purchase offer. That way, once you are ready to present a bonafide offer, your focus will be on the primary issues of price, terms, and closing date.
Reviewing and understanding the purchase contract form ahead of time can also help you strengthen your negotiating position, protect yourself from incurring unnecessary costs or problems, and gain a better understanding of what you will need to do to conclude the sale.
Herbert (Allen) Anderson is a Houston, Texas-based REALTOR® I Trusted Advisor with an immensity of experience and core understanding of how to deliver first class client service. Allen is an expert in recruiting and training professionals. He is respected as a top real estate agent as well as a leader in the real estate industry. Allen has been recognized as a premier team builder and has helped real estate agents achieve higher income levels. Allen is currently part of the eXpansion team for eXp Realty. Since September 2013, eXp Realty has achieved annual growth at a rate that positions it as one of the fastest growing real estate brokerages and real estate brands in the United States. eXp Realty refers to itself as Agent-owned and the company recently became a public company distributing equity to its productive agent owners. eXp Realty also provides an ESOP style Stock Ownership Program for its agents and brokers as well as a revenue sharing program all designed to enhance the agent-centric business model as well as increasing agent attraction and retention.
• Master Certified Negotiation Expert (MCNE)
• Accredited Buyers Representative (ABR)
• Sellers Representative Specialist (SRS)
• Seniors Real Estate Specialist (SRES)
• Graduate, REALTOR Institute (GRI)