Purchasing a home is exciting, but there is more to it than merely finding the perfect place to live. Before you start packing, you need to sign a valid real estate contract to memorialize the sale.
A purchase agreement is the foundation of all home acquisitions. Understanding the basics of what a purchase agreement should contain and why may help you feel more at ease signing on the dotted line.
The contract sets out essential information
A real estate purchase agreement needs to contain basic information before it becomes binding. The first section of a contract should cover the following:
- The legal names of the parties
- The address of the property
- The purchase price
- The date of execution
It may seem minor, but missing even one of these elements may jeopardize your purchase.
The agreement should contain an inspection period
You have the right to look at the property and decide if you want anything fixed. You and your representatives may enter the home during this inspection period and review the structure. You may also look over title documents that impact the use of the property. When the inspection period ends, you have the right to back out if the seller does not fix issues.
The seller needs to disclose specific information
The seller needs to provide insight into the home and property, especially the bad. For example, if the house has termite damage or asbestos, the seller needs to let you know. A failure to disclose may put you in harm’s way and the seller at risk for a lawsuit.
A new home should not result in dire legal and financial consequences. You may face long-term repercussions if you proceed to a purchase without a valid and binding contract.