Whether buying or selling, all real estate transactions involve a contract. The contract is used so the sale of the home can be arranged and made legal. In addition, the contract provides all the arrangements between buyer and seller in a format that is official. Included in the contract would be the parties information, selling price, interest, points, financing contingency, termite inspections, title issues, home appraisals, etc.
Since buying or selling a home is big business involving big money, it is essential that a contract be used. Even if the seller and buyer are best friends or family, the contract keeps things on the up and up. Although things would likely not go wrong, this is simply a way to make sure this investment is fair but most importantly, legal. Often, you would find the sales contract provided by the seller’s agent, which is then completed by all pertinent parties. Keep in mind that while this can be a good solution, it can also come out somewhat one-sided, leading to misconceptions or misunderstandings.
The real estate contract comes into play once the buyer finds the house that he or she wants to purchase. Then, an offer is made to the seller, at which time it is accepted or a counter office takes place. Along with the price are all types of special conditions. For instance, the contract might state that the oven and refrigerator are staying, that window treatments are included in the sale, that a birdbath is a part of the deal, or that a carpet allowance is being provided to the buyer.
Again, the contract simply puts everything out on the table so that if there are any questions or promises not kept, a legal document on which to fall back is available. Once the contract is signed, an official date and time is set when you will take over possession of the house, meaning keys are provided and you can move in. Because buying and selling a home is a complex transaction with significant money involved, you want to do everything possible to protect yourself, which is why the contract is so important. Just remember that while most real estate contracts are universal, some differences may apply from state to state.