Real Estate Contract Sections

Usually most Real Estate Contracts contains the following items:

Section 1 usually includes contact information about both the buyer and seller. Their name(s) and address.

Section 2 usually includes the legal description of the real estate. The common address of the property (i.e. street address) and the legal description (i.e. the Rectangular (or government) survey or Metes and Bounds legal description). If a survey of the property will be done add a statement of that fact in this section and make sure to note who will be paying for it.

In this section you should also list the items that will and will not be included in the sale of the property. What is and what is not included in the sale of the property.

Section 3 usually includes the purchase price of the real estate. The purchase price and how the buyer will be paying for the property. Any contingencies pertaining to financing should also be included in this section. If an appraisal is to be done refer to it in this section and be sure to note who will be responsible for payment.

Section 4 usually includes possession. Otherwise know as "closing" and this section establishes the date when the buyer will take physical ownership of the property.

Section 5 usually includes contingencies, here are the contingencies listed of both the buyer and seller. It is common for the contract to be contingent upon such things as inspections, surveys, or even the buyer or seller completing another transaction. A mortgage contingency, subject to obtaining a mortgage (if applicable) and the specifics of the mortgage--amount, rate and term.

Section 6 usually includes inspections. If the buyer is requesting any inspections they should be addressed in this section. Common inspections include lead based paint, radon, complete home, well and septic. Termite and Pest inspection is an important inspection. Make sure you address who will pay and repair if there is infestation or damage. To avoid charges arising from inspections a seller can stipulate that the property is being sold "As Is."

Section 7 usually includes seller's warranties and representations. It should cover how the seller plans to convey title to the buyer. Also is should include whether or not the seller will be providing a title policy to the buyer.

Section 8 usually includes walk through inspection. Before closing the deal, the buyer may, upon reasonable notice and at a reasonable time, wish to conduct a walk through inspection of the real estate.