What You Need to Know About The Real Estate Contract

The real estate contract is the most used but least understood tool in the business today. There is no way you can be successful if you do not possess knowledge about the real estate contract itself.

Since they are based on common law contract principles, it’s vital that you get to know contract law well. In other words, offer, counter-offer and acceptance.

The contract is usually drafted in the form of an offer which will be signed by the buyer. Of course, the contract will not be binding if the seller does not accept. Here, there is mutual assent if both the buyer and seller agree to the terms and conditions stated.

For example, if the contract states that it must be accepted by facsimile, then there is no other way it can be considered acceptable, especially if acceptance of the contract is made via the phone or by email.

If there are alterations made to the contract, then it is a counteroffer. For example, if the seller accepts the terms and conditions but wants the buyer to close fifteen days earlier.

Now there are two types of contracts: the bilateral and unilateral contract. The first is the most common while the second involves a situation where the seller is obligated to sell the property but the buyer is in no obligation to buy.

Some of the common terms used in a contract involve mutual assent, in writing, identify the parties, identify the property, purchase price, consideration and signatures.

All of these are basic requirement and are necessary to be met in order to make the real estate contract completely valid.