Real Estate Contract

When buying, selling or investing in real estate, you will sign a real estate contract. If you use a realtor, he/she will prepare your real estate contract that complies with real estate laws. A real estate investor can prepare his/her own real estate contract with the help of various books or real estate contract software. Real estate addendums can be added to contracts to make the deal more favorable and obligations to the contract can change hands using real estate assignments.

What is a real estate contract?

A real estate contract is a formal, legally binding document containing the terms of an agreement between two or more parties for a real estate deal.

A real estate contract must contain:

• Competent parties 

For a real estate contract to be enforceable, the parties in the contract must be competent. If one of the parties is insane, intoxicated, or underage, the contract may be rendered void or voidable.

• Offer and acceptance 

There is no contract without offer and acceptance of the offer. All terms of the contract must be agreed upon by all parties. After the terms of the contract are agreed, the acceptance must be communicated to bring the contract into being.

A real estate contract must be in writing and signed by all parties bound by the agreement for it to be enforceable, see Real Estate Contract Accepted.

• Legality 

The purpose of the real estate contract must be lawful.

• Consideration 

Consideration is the obligations each party makes to the other necessary to make the contract enforceable. For example, a buyer has the obligation to pay for what the buyer agrees to buy. The seller has the obligation to sell to the buyer.