Any valid estate transaction is sealed with a contract, whether buying a family home or leasing an office space. As with any written agreement, the details of the contract indicate how enforceable it is. It must address several issues, and even the smallest detail can impact a purchaser’s or seller’s risks and liabilities, so the contract must be done right.
To be binding, it must include all the essential details regarding the transaction, including price, an accurate description of the property, compliance with all laws, and a deposit. The buyer and seller must be of sound mind and the legal owner or their representative. It must also include contingencies. For it to be valid, both sides must voluntarily agree to the terms.
Important details to address
Every transaction involves details about the property and the terms for purchase. Some general issues include:
- Property in the transaction: It is essential to describe the property’s details with up-to-date language that reflects the property. This includes the location of property lines and zoning issues.
- Due diligence: There should be time set aside for the buyer to do their due diligence of all the terms in the contract. In today’s world, this can move reasonably quickly.
- Property’s condition: The buyer may need to negotiate the cost of an upgrade or requirements to meet before finalizing the deal in the purchase agreement. The owner may stipulate that it is “as-is.”
- Jurisdictions: The agreement price should acknowledge the cost of local, state and transfer taxes, other fees related to the property ownership and upkeep, and different rules and obligations as owner/occupant.
Fraud negates the contract
The contract becomes void if the seller is not the title holder or they or their representative provided fraudulent information in the agreement. Conversely, the buyer who does not meet the terms of the deal also makes it void. Disagreements over the terms or meeting them can lead to litigation in court. Generally, the two sides may start with mediation or negotiation, but an impasse will land them in court. If there is a dispute, it often requires real estate attorneys who are comfortable litigating. This is often the best way to enforce a valid contract or void one based on fraudulent information or actions.