Real estate contracts are legal documents that outline the terms and conditions of a transaction between a buyer and a seller. These contracts are essential in ensuring that both parties are protected and that the transaction proceeds smoothly. Here are some common real estate contract clauses that you need to know.

1. Purchase Price

One of the most critical clauses in a real estate contract is the purchase price. This clause outlines the amount the buyer will pay for the property. It should also specify when and how the payment will be made.

2. Earnest Money

This clause requires the buyer to provide a deposit, known as earnest money, to the seller to show their commitment to the deal. This clause should outline the amount of the deposit, where it will be held, and the circumstances under which the deposit will be refunded.

3. Closing Date

This clause specifies the date on which the transaction will be completed, known as the closing date. It should also include any contingencies that may delay or accelerate the closing date, such as obtaining financing or completing necessary repairs.

4. Property Condition

This clause outlines the condition of the property at the time of purchase and any agreed-upon repairs or improvements that the seller is responsible for completing before closing. It should also specify whether the property is sold in “as-is” condition or with warranties.

5. Contingencies

Contingencies are conditions that must be met for the sale to proceed. Common contingencies include obtaining financing, a satisfactory inspection, or the sale of the buyer`s current residence. This clause should identify any contingencies and the consequences of not meeting them.

6. Disclosures

This clause requires the seller to disclose any known defects or issues with the property, such as leaks, foundation problems, or environmental issues. Failure to disclose material defects can result in legal action against the seller.

In conclusion, these are some of the essential clauses that should be included in a real estate contract. It`s essential to have a clear understanding of these clauses before signing a contract to ensure that your interests are protected. A real estate attorney or agent can provide guidance and assistance in reviewing and negotiating a contract.