In our modern world, it is important to seal the real estate deal with the contract pertaining thereto. You want the transaction to be legal and binding in all aspects especially when you consider that lawsuits are expensive. Add in the fact that precious real property is involved and you have every reason to be vigilant about the finest print in the contract.

If you have a real estate agent on your side, perusing the contract is easier. If you can have a lawyer browse through it, too, then you have greater chances of ensuring your legal protection in the transaction. Just remember that all real estate contracts have common law contract principles as their foundation so you might also want to brush up on contract law.

Mutual Assent

The first and most important element in any contract is mutual assent. In layman’s terms, this is simply a meeting of the minds where both parties mutually agree on each and every provision in the contract. If consent on either party was made by duress, force and fraud, there is a valid ground for nullification. Before mutual assent is achieved, however, you will undergo the steps known as the offer, counteroffer and acceptance. The offer, which is on the part of the buyer, is usually made in standardized format in accordance with state laws.

The seller can then make a counteroffer, if so desired, by stating the conditions before acceptance is offered. For example, the seller may say that” I will accept the offer once you agree to close the sale on or before a specific date”. Keep in mind that a counteroffer is not binding on any party especially as the buyer can reject it. Acceptance only happens when both seller and buyer agree to the terms and conditions of the sale. At this time, meeting of the minds happen and the contract can be drawn up.

Put it in Writing

Nowadays, the general rule in real estate transactions is to put everything in writing. Although there are exceptions to the rule, you want to protect yourself and your investment in any court of law by presenting written evidence of the transaction. You do not want to be in a situation where your word is working against the word of another person. Plus, the written contract obligates both parties to carry out the agreed terms lest penalties and charges be imposed on the offending party. This is especially true for bilateral agreements where seller agrees to sell the property and the buyer agrees to purchase it. Otherwise, the liquidated damages provision comes into effect.

The contract should include certain important provisions including but not limited to the complete names and addresses of the parties, be it as individuals or as corporations; complete description of the property especially in terms of complete address and area covered by both the house and the lot itself; purchase price agreed upon by both parties; and consideration received, which is very important to consider the contract as valid and enforceable.

Of course, your signatures on the contract are very important. Otherwise, it can be considered null and void because of the lack of evidence as to mutual assent. Both parties must be of legal age and of sound mind when signing the contract, usually in the presence of witnesses.

Author Bio: Article by Hank Ericson, a Realtor that focuses on Lansdale Pa Real Estate & North Wales PA Real Estate.

Category: Real Estate
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