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
Contracts Should:
- 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
Key Points:
- 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/
