A Real Estate Contract: is a legally-binding document that outlines the agreed upon terms between two or more parties in a real estate transaction and becomes legally binding when signed by all parties.
4 Types of Real Estate Contracts:
- Purchase Agreement Contracts
- Assignment Contracts
- Lease Agreements
- Power of Attorney Contracts
- Be written in clear language (avoid abbreviations)
- Include deadlines and specify what happens if not met.
- List all agreed terms of sale – such as included appliances or home warranty information.
- Have a written contingency that outlines what will happen after the home inspection. Can the buyer walk away? Does the seller need to fix according to the inspection report?
- Include a Financing Clause – This allows the buyer to back out if they can’t obtain financing or cannot sell their current home.
- Specify who pays what in closing costs.
- Outline a default plan – What happens to each party if one of them walks away. Is there a monetary penalty? This can help avoid a court case.
Common Types of Real Estate Transactions for the Investor:
- Buying a Home
- Selling a Home
- Buying a Property To Rent
- Fix and Filp
- Wholesaling A Property
- Prehabbing a Property
- Serving as a Lender
Finding the money and having the nerve isn’t enough for property investing; you need the right deal. #Ironclad
- 1There must be a contingency in the real estate contract that allows people to walk away if the inspection goes awry.
- 2You need to ask to find out who is in charge of closing costs.
- 3A lot of sellers need to include a home warranty when selling a property.
There are essentially four types of real estate contracts: purchase agreement contracts, contracts for deed, lease agreements and power of attorney contracts. They each have different uses and stipulations
See the original at: https://www.fortunebuilders.com/types-of-real-estate-contracts/
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Finding the money and having the nerve isn’t enough for property investing; you need the right deal.
In real estate, everything comes down to the contract. Sure you need the money, and the gumption to invest, but at the end of the day what’s in the contract is what controls the deal. To make the right moves, and be able to profit from them, you have to do more than find great properties at amazing prices; you need to finalize the deal in black and white, legally. Don’t neglect the contract, or you’ll find the effort you spent searching out that deal goes to waste.