What You Need to Know About the Real Estate Contract

There’s no question that understanding the real estate contract can be crucial to any investor’s success in the business.

Based on the principles of offer, counter offer and acceptance, most states have standardized contracts that real estate attorneys and agents use regularly. All real estate contracts are bilateral in nature, and where a buyer and seller are involved.

That said, here are a few conditions that make a real estate contract valid:

Not only should there be mutual assent (agreement) but it must be provided in writing right from start to finish. The parties must be clearly identified and should include full names and initials if necessary. If it’s a corporation, then that must be mentioned clearly as well.

No vague descriptions are allowed when identifying the property in a real estate contract and will render it invalid. It has to be described legally so as to prevent any issues.

Also, the contract has to state the price of the property or at least, a recognized value as determined by experts in the real estate business.

Another interesting aspect of making a contract valid involves consideration. This is defined as the benefit or interest that leads to a promise being made. For example, the contract should state that “ten dollars and other good and valuable consideration has been paid and received”.

Finally, if a contract does not have any signatures, it cannot be deemed valid. Not only should both parties be of legal age but also of sound mind. A witness or notary’s signature is not required.