While purchasing a real estate property, it is mandatory to have a properly executed or written real estate purchase agreement. A real estate purchase agreement is also referred as real estate contract or purchase contract. It is a binding agreement between two or more parties with legal clauses to avoid future disputes.
Hence, while entering into an agreement for purchasing a real estate property, it is advised to include some basic clauses that can expedite your registration process and saves the buyer from unwarranted delays. No doubt, real estate agreement varies depending on the type and location of the real property. But, there are some clauses that can be included in all the forms of purchase agreements.
Whether the agreement is prepared in general or by a professional lawyer there is a necessity to include these below said elements.
Full names of both the buyer and seller
Of course it is a mandatory statement and the information of the agreement identifies who is purchasing the property and who is selling it.
Authorized description of the property
This information must be adequate to identify and locate the real estate property.
Purchasing price including the mode of payment – The agreement should specify the total amount at which the seller is willing to sell the concerned property and the purchaser is willing to commit for the same. This information should be mentioned in detail along with the modes of payment whether by cash, check or by any other method.
It is also said to be the deposited amount. This element is mentioned in the agreement as it states the amount deposited to the purchase price at the time of closing. This amount is refundable or non refundable basing on the statements of the agreement. If this statement is mentioned accurately, the amount is refunded to the real estate purchaser if he wants to come out or break the deal.
Date of Ownership and closing date
This information in the agreement specifies that the title is secured from the seller to purchaser or buyer if he pays the balance amount to the seller. The seller signs this deed to convey the title to the real owner or attorney or to the agent to ensure the transfer of ownership.
Agreement closing costs
It is necessary to mention this element to ensure whether the seller or buyer is going to bare the closing costs of an agreement. This helps to eliminate the future disputes the buyer and seller as both of them will come to a mutual understanding before implementing this clause. In general, closing costs include title insurance, transfer taxes, brokers’ commission and other transaction fees.
The agreement allows a specific time to the buyer to inspect the real estate property before signing the agreement. This helps the buyer to determine his future real estate investment on the repairs, modifications and fixings.
Mediation/Arbitration of disputes
In this clause, both the parties should agree for combined settlement of the disputes at the time of the deed or transaction.
Minimum damages to the buyer
The contract states that the damages will be at minimum to the buyer if the buyer violates the contract in middle.