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Complete a purchase with a real estate sales contract.
Buying or selling real property can quickly get complicated. Find out what to include in a contract for a new home or other real estate transaction.
What is a real estate contract?
A real estate contract is a legally binding document between the buyer of a property and the seller. Like other types of sales contracts, it states that there will be an exchange of ownership for a property, usually (but not always) for money. For a home or property purchase to be valid in the U.S., the purchase agreement must be in writing.
A real estate contract is distinct from a mortgage note. A mortgage note is an agreement between a borrower and lender that secures the loan used to buy the property, while a real estate contract is between the buyer and property owner, and it concerns the property itself.
What to include in a real estate contract.
A real estate contract should include:
1. Name and contact information of the buyer
2. Name and contact information of the seller
3. Location of the property
4. Value of the property
5. Purchase price and down payment for the property
6. Sale and closing date
7. Time frame for the transaction and deadline for completion of the sale
8. Details about who has to pay for expenses such as inspections, surveys, title insurance, and closing costs
9. Information about utilities, property taxes, and other fees
10. Date of closing
Some of the most important elements of a contract are buyer contingencies. These elements allow the buyer to make a decision based on the results of inspection of the property by an expert. If the inspection reveals issues that the buyer is not willing to deal with or pay for, a contingency can allow them to back out of the deal. This also applies to disclosures the property owner makes to the prospective buyer via escrow.
Both of these elements can be time consuming. Before signing the contract, buyers and property owners alike should consider how much time they’ll need for inspections and disclosures, and for any additional negotiations or considerations that arise from them. Buying or selling property is an enormous undertaking. Make sure you understand everything in the contract before finalizing it.
How to draft a real estate contract.
In nearly all cases, an attorney needs to draft and create a real estate contract. In some states, a real estate agent might have access to a form or template of a contract, and they are legally allowed to fill in blanks in that form. However, they cannot create or alter anything substantive, as that would technically be practicing law.
Check your state’s requirements for whether or not your realtor or broker can work from a template, or whether you have to have a real estate attorney draw up a personalized contract for you.
Go digital with real estate deals.
Contracts take time and effort. You can make them more efficient with digital documents and electronic signatures. E-signatures are legally binding in all U.S. states and territories and most other countries across the globe. Digital contracts are easier for everyone to access, as they can be viewed on any device capable of displaying a PDF.
Send documents for e-signature.
Real estate contracts often require several signatures from the parties involved as proof that they understand and agree to various sections and subsections. Whenever a contract is amended or updated, or an addendum is added, new signatures are necessary. Gather signatures electronically, so all parties can review and consent to contracts and move the deal forward.
Fill and sign forms online.
A real estate purchase contract is only one part of a larger constellation of documents. Commercial and residential sales can include several forms outlining everything from home inspections to counteroffers to zoning, and involved parties need to review and sign all of them. Electronic forms make life easier for homeowners, real estate brokers, sellers, and everyone else who might be involved in the sale of property from one party to another.
Create better real estate contracts with electronic signatures.
Real estate contracts are among the most important agreements homeowners will sign in their lives. First-time homebuyers in particular need to be able to access and review everything in the contract for their new home. Paper contracts add friction and time to an already high-stakes deal. With Adobe Acrobat Sign, homeowners, sellers, and real estate brokers alike can finalize agreements more efficiently and make selling and purchasing a home a little easier.
