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Real estate contracts, also called purchase agreements, are legal documents signed by buyers and sellers once an offer is accepted on a home. Purchase agreements specify every detail related to the home sale, such as a detailed property description and setting a closing date. It’s important to work with a licensed Realtor and Orlando real estate lawyer to help you fully understand the agreement terms and help both parties adhere to contract commitments. Here are the clauses you should ensure are in your real estate contract when purchasing a home.

Property Identification

Your real estate contract should spell out basic information about the property so there are no discrepancies. This section should include the names of the buyers and sellers and the names of others involved with the sale, such as a real estate lawyer in Orlando. This section of the contract should also include the property’s address, purchase price, and closing timeline. The contract should also list effective and termination dates for different elements of the property sale, such as when an inspection should be conducted and the title search completed. All parties involved with the transaction need to sign the contract for it to be legal.

Property Description

Every real estate contract should give a detailed description of the property. The description should include the lot size, parcel numbers, legal address, along with city and county information. The property description should also state if the purchase includes furniture or appliances as part of the offer.

Contingencies

Contingencies are conditions that must be met for the contract to remain in effect. Here are some of the most common types of contingencies you’ll want to address in your real estate contract:

Financing

One of the most common types of contingencies is obtaining financing. You’ll need this contingency in your purchase agreement unless you pay for the home with cash. This contingency states that the home sale is dependent on mortgage approval. If you’re not approved for a mortgage, the offer may be withdrawn by paying a fee.

Inspection

Inspection contingencies allow you to terminate the contract or negotiate repair costs if the inspection report reveals significant issues with the home. In today’s competitive housing market, many buyers waive the inspection contingency in their real estate contracts to close quickly and help their offer stand out. However, waiving an inspection contingency can be a costly mistake, as you can’t back out of the sale regardless of the structural issues with the home.

Title

All home sales are contingent upon the seller’s ability to sell the home free and clear, with an active title and no property liens. A title search is performed on every home sale to ensure the sellers have the right to sell the property. If the title search reveals a title issue or property lien, you can back out of the sale or adjust the closing timeline to allow the seller to resolve the issue.

As is

An “as-is” contingency specifies that the home will be sold in its current condition, regardless of structural issues, repairs, or defects. This contingency prohibits the buyers from backing out of the contract due to the condition of the home. If this contingency is in your contract, you can’t negotiate the home’s purchase price based on needed home repairs.

Sale of Existing Home

If you currently own a home and need the money from selling it to purchase a new property, your offer would be contingent on the sale of your current home. It’s important to provide a reasonable time frame, such as 30 or 60 days, to sell your old home.

These are just some of the contingencies you may want to include in your real estate contract for your home purchase. Contact our Orlando real estate lawyer to discuss your home purchase and what provisions you should include in your real estate contract.

Default Provisions

Your purchase agreement should specify what actions can be taken if either party fails to adhere to the terms of the agreement, such as terminating the contract or moving the closing date.

Financial Provisions

In the months following the home sale, there are many financial factors you’ll want to negotiate in your contract, like who will pay property taxes and HOA fees for the month of closing. This provision should detail how escrow will work during the purchasing time frame. You’ll also specify who’s responsible for closing costs (usually the buyer).

Boutty Law Firm— Real Estate Lawyer in Orlando

The home purchase process can involve complex legal issues and documentation. There are many benefits to using a real estate lawyer in Orlando to help complete the home sale. Contact our team at 407-622-1395 or contact us online for a consultation to discuss how we can help you purchase your dream home.