Real estate contracts can be complicated and even harmful to both buyer and seller if all parties involved are not careful. It’s best to work with a professional real estate law firm with experienced attorneys who can assist you throughout any property-related issue.
Here are a few must-have conditions for real estate contracts to be successful.
Must Disclose Defects
Failure to disclose defects on a real estate contract is a serious offense and can result in even more lawsuits down the line. Hopefully, no one involved with the property sale is trying to take advantage of other parties, but it happens far too often in real estate deals; someone intentionally hides a problem to either make more money or spend less. Additionally, in California, real estate agents are required by law to disclose any information about a death that occurred on the property within three years before the original sale.
Probably the most important aspect of any real estate contract is the financial information. All real estate contracts should state whether or not an offer is contingent upon obtaining financing at specified interest rates. And all the details of the obtained mortgage must be laid out to avoid any confusion. One caveat regarding financial terms is that they have to be accurate representations of the buyer’s actual financial situation. For example, if the buyer can’t afford the monthly interest rate on the house if the rate is higher than 7%, they shouldn’t put 7.5% in their offer. Such a mistake means that the seller will keep an earnest money deposit if the buyer backs out.
Another real estate contract essential is the expected closing time. This will state exactly how much time both the buyer and seller have to prepare before the actual finalization of the sale. Typically, the most common time frames are between 30 and 60 days to close. Deepening on whether or not the seller needs to find a new place to live, any remaining lease contracts, or job relocation issues can all affect the closing date as well. Some buyers want to finish everything within two weeks, but that can be difficult, so it’s best to work alongside real estate attorneys to find a more realistic closing date and include it on the contract.