A real estate contract can protect you from fraud during the purchase of a new property. Reading a contract takes time and is something you should do well in advance of agreeing to anything.
Knowing how to read a contract and what to look for can help you verify its legitimacy. With the right terms and conditions, you can complete your purchase with peace of mind.
Pay attention to contingencies
Most real estate contracts have contingencies that will dictate which direction a sale goes. According to Realtor.com, most contingencies require you, the buyer, to meet some objective before the sale proceeds. For example, you may need to sell your current home before you can follow through with the purchase of a new property. Other contingencies may include mortgage approval or require the completion of a home inspection and appraisal.
Highlight earnest money request
Earnest money is the amount of money you will put down to show how serious you are about following through with the sale. This amount may fluctuate depending on your circumstances and what you have available, however, most sellers require that you at least pay a bottom-line amount before the sale will proceed.
Examine terms and conditions
There is some variance in the terms and conditions of real estate contracts, which could influence the terms and conditions. Thoroughly examine the clauses in the contract to determine whether the sale will provide a satisfactory benefit for you.
If you have questions about a contract, you have the right to ask for clarification. Choosing to involve a professional can improve your understanding of the agreement so you can make a confident decision.