So you been searching for properties, talking to Realtors and have been driving for dollars. After many hours of analyzing comparable sales, and calculating cost, you finally find the right investment you feel comfortable to take upon.
So now what? It’s time to grab it, hold it and secure the deal. You do this by getting it under contract.
Real Estate contracts are based on common contract principals, so it is important that you understand the basic of contract law.
The process begins with an offer. A contract is formed when the offer is made and accepted. In most
Contracts are not binding unti the seller accepts. Which at this point of acceptence you are creating a meeting of the minds. If the offer comes back to you the buyer with changes, there is no binding contract, but rather a counteroffer. A period of negotiation, where buyer and seller will try to meet in the a mutual benefitial ageeable price, terms and conditions.
Basic Requirements of a Real Estate Contract.
Several basic requirements must be presented to make a real estate contract valid:
- Mutual Agreement – There must be a mutual agreement or the minds.
- In Writing – With few exceptions, a contract for purchase and sale of real estate must be in writing to be enforceable.
- Identify the Parties – The contract must indentify the parties. Who the buyer and seller is.
- Identify the Property – The contract must specify the property being purchase/sold. It should also include any real property left in the property and its legal description.
- Purchase Price – The contract must have a purchase price. Please be advise this doesnt necessary has to be money/paper currency. You could use anything of value.
- Concideration – Acontract must have consideration to be enforceable. Consideration is the benefit, interest or value that induces the promise to buy.
- Signatures – A contract with no signature from both parties [ buyer and seller] is not a contract, but a wishful letter.
Now that you have a basic under standing of offers and contracts… Its time to start pulling the trigger on the properties you have identified as a good investment with the right value/profits you are looking to make out of your investment.
Real Estate investing, could be categorize as a contact sport. The more proactive activities you do the bigger you chances have to succeed. What I mean by this, you have to view, analyse 100 properties, to maybe take action on 5-10 properties, maybe getting 1 under contract.
Like I always say, it is not a quick get rich over night career, it is a long but beneficial path to wealth and freedom. Good luck!