Are You Familiar With Contracts?
 

Timing and Validity

Two important factors are essential in writing a contract:
Timing
Validity
If a contract is not written immediately, it may result in a lost sale. Buyers may change their minds or see another house they like better. If there is a loophole in an agreement, it may also result in a lost sale. As an owner, you have two ways to write a contract:
Hire an attorney
Write it yourself

By hiring an attorney, the agreement will be valid, but there may be a delay in its preparation. By writing it yourself, it can be done immediately, but may not be valid.


Disclosure to the Buyer

Most properties now are required to have a disclosure about its condition filled out and offered to the buyer. The buyer should have 3 to 5 days after receipt of this document to rescind the contract. It is very important that the buyer be given this document immediately! Another document, which is required by the Internal Revenue Service, is the Federal Investment in Real Property Tax Act which, if not properly handled, could cause great delays in the sale. Also, there are lead-based paint disclosures and seller carry-back disclosure notices that are used if the seller carries any portion of the financing. Failure in supplying these disclosures may cause grounds for rescinding the transaction or causing delays in receiving your payments.

Contingent Sales

This problem has troubled real estate agents from the beginning of time. Let me explain. Many times the buyer wants to buy the owners property, but can't because they haven't sold their home yet. You don't want to lose this buyer, but on the other hand, you don't want to tie up your property if a better-qualified prospect comes along. This is why the 72 Hour First Right of Refusal works so well.

The buyer makes an offer to buy the owners property. Subject to the sale of the buyers property the owner counters with a yes, but with the provision that if another offer comes in which is also acceptable to the owner, then the owner gives the first buyer 72 hours to remove the "contingency of sale" clause or cancel the sale. This technique should be handled with a Professional Agent or Attorney.

What is Some of the General Information That Needs To Be In The Sales Agreement?

The date and location of signing the contract.

All information on the buyer, including vesting.

Where and in what form will the deposit be handled.

The terms of purchase - CASH, CONTINGENT ON NEW FINANCING, ASSUMPTION, FHA, VA, SUBJECT TO or OWNER FINANCING.

Timing limits on escrow, inspections and financing.

Approval of all title information, agreements or stipulation regarding tenancies or rights of persons in possession of the property.


Radon, lead-based paint, energy efficiency.

Seller property disclosures.

Electrician, plumbing, soil, termite, roof, etc. inspections. who pays and when.

Should a survey be done, cost and who is responsible for it.

Escrow and Title Company names.

Special documentation and their uses, rights of the broker representing the buyer, commissions, if any due on sale.

Buyer and seller signatures.

This is not a complete list because it changes with every transaction.