Are You Familiar With Contracts?

Two important factors are essential in writing a contract:

• Timing

• Validity

If a contract is not written immediately, it may result in a lost sale. Buyers may change their minds or see another house they like better. If there is a loophole in an agreement, it may also result in a lost sale. As an owner, you have two ways to write a contract:

• Hire an attorney

• Write it yourself

By hiring an attorney, the agreement will be valid, but there may be a delay in its preparation. By writing it yourself, it can be done immediately, but may not be valid.

Disclosure to the Buyer

Most properties now are required to have disclosure about its condition filled out and offered to the buyer. The civil code makes this a law and also says that the buyer has 3-5 days after receipt of this document to rescind the contract. It is very important that the buyer be given this document immediately! Also, there are seller carry-back disclosure notices that are used if the seller carries any portion of the financing. Failure to supply these disclosures may be grounds for rescinding the deal or causing delays in receiving your payments.

Contingent Sales

This problem has troubled real estate agents from the beginning of time. Let me explain. Many times, the buyer wants to buy the owner's property, but can't because they haven't sold their own home yet. You don't want to lose this buyer, but on the other hand, you don't want to tie up your property if a better-qualified prospect comes along. This is why the 72-hour first right of refusal works so well.

The buyer makes an offer to buy the owner's property, subject to the sale of the buyer's property. The owner counters with a yes, but with the provision that if another offer comes in which is also acceptable to the owner, then the owner gives the buyer 72 hours to remove the contingency of sale clause or cancel the sale. This technique should be handled with a professional agent or an attorney.

What is some of the general information that needs to be in the sales agreement?

• The legal names and addresses of the Sellers and Buyers.

• The date when the purchaser should have their approval, and when the settlement will take place.

• Where, and in what form, the deposit will be handled.

• The terms of the purchase - Cash, FHA, VA, Owner Financing, etc.

• Time limits on inspections and financing.

• Approval of disclosures provided by the Seller.

• Structural, electrical, plumbing, termite, etc. inspections -who pays, and when.

• Buyer and seller signatures and the date.

This is not a complete list because it changes with every transaction.