Contract drafting provides everyone with clarification about responsibilities and conditions. Skipping components could compromise your agreement and leave you scrambling for solutions.
Knowing which topics to discuss in a real estate contract, as well as some general drafting tips may improve your experience and help you to reach a suitable agreement.
Outline and structure
A contract draft gives you a place to outline the terms of the relationship. With a logical structure that highlights critical components, you and others can easily identify the information needed to answer questions that may arise. According to Realtor, some topics to consider addressing may include the following:
- Property warranties
- Date of possession
- Escrow and financial obligations
- Settlement date
- Responsibilities and expectations
Risk assessment and planning
Prior to purchasing commercial real estate, you probably look closely at its potential for growth and marketability. You will also want to assess its risks at present and in the future. As you draft your contract, you can include your findings. Disclosing potential challenges can help everyone have a clearer picture of risks before they sign the dotted line.
You can also discuss strategies for handling disputes and methods for addressing challenges. Having these expectations in writing may reduce conflict and misunderstanding. Contract drafting gives you the space to brainstorm an ideal agreement. You can encourage all parties to thoroughly read through the contract before a final discussion takes place. Encourage all participants to express concerns or suggest modifications to the agreement. Following a careful process may encourage understanding and responsibility from the start of a new investment opportunity.