“Don’t you have a contract?” a family member will say when the company skips a clause of your contract. Of course, it will be frustrating, and confusing. Stop asking yourself how is it possible and call your licensed real estate agent first and then your attorney. Meanwhile, we can help you understand a few things about real estate contract types and policies.
The real estate contract maze
There are many different types of contracts. The sales agreement between a buyer and a seller. The builder who agrees to build a certain type of structure for a defined amount of money. Don’t worry, Fort Lauderdale movers know the ins and outs of these legal conundrums. In general, a real estate contract is an exchange of promises between two people.
But sometimes people break their promises. Say contract states you will get wooden windows and doors, but the builder puts in PVC profiles, that have a wooden finish. It may be that both of you understood something different by the term wooden door and window profiles.
A real estate contract is not a guarantee
“But we have a contract”, you have this very logical argument. And he brushes you off: “Sue me”. The only option now is to advise with your attorney whether or not it would be financially worthwhile to spend your resources suing the builder. Eventually, the only thing you could gain is him either lowering the price or correcting the problem.
Important disclosure: A contact alone cannot force someone to do something. A contract establishes the basis of legal action.
You may have to force one party to complete the terms of the contract. Attorneys in court usually facilitate that enforcement. Questions of you having a good case, the costs of litigation, gains if you win, and how much time you have to wait are all valid. Consider them before deciding whether or not to sue for enforcement of a real estate contract. It may be frustrating that you’re missing 50 square feet of deck space, but it may simply not be worth the time, stress, and money a lawsuit would require.
When exchanging value, a contract is mandatory
Take an example of Smith selling his property to White. White makes an offer to Smith, thus meeting the first requirement of an offer. Smith accepts the offer and now we have a formal acceptance in place. However, the contract is not yet enforceable.
We will now need some sort of value exchanging between Smith and White. In this case, Smith is receiving a promise from White that he will purchase the property at the price he offered, and Smith is making a promise to sell the property and transfer the deed over to White.
After this verbal agreement, the parties will need to be deemed legally capable in order to enter into the contract. If both Smith and White are at least 18 years of age and have the mental ability to enter into a contract, then they can proceed.
Finally, the contract must have a legal purpose. In this case, Smith wants to sell his home to White, and that, here, is a legal purpose.
Real Estate Contract 101: Purchase agreement
A purchase agreement is the most common type of real estate contract. This contract specifies the details of the sale. It will have stated: the address of the property, the price, names of both parties, signatures of both parties, and the closing date.
There are several kinds of purchase agreements as follows:
- State/Association Purchase Agreement – the standard agreement between a buyer and seller through a real estate agent;
- General Purchase Agreement – a short version of the Real Estate Contract above, but is usually used when no real estate agent is hired;
- Property-Specific Purchase Agreement, which is being used for vacant land or a mobile home.
- Of the three types of real estate contracts, and you may not know this, but one will certainly be necessary for real estate deals. A contract as a legally enforceable document between two or more people consists of an offer, acceptance, consideration, legal capacity, and legality of purpose.
Real Estate Assignment Contract
A Real Estate Assignment Contract is a wholesale investment purchase agreement. There is a term added to this type of contract, the term “assigns” next to the buyer’s name that differentiates it as an assignment contract. The “assigns” would be anyone that you want to pass your purchase rights along to. Now you can buy the penthouse, flip it, or rent it, or any other strategy that’s legal. But, you can also pass it along to someone else for profit, never buying it yourself.
You’re not just passing your purchase rights along. You’re also passing along your obligations in the contract. The party to whom you’ve assigned the deal to is now responsible for taking the deal through to closing.
Lease as a real estate contract
This is a contract that binds an owner and a renter to the property. Therefore, the landlord enters into an agreement with a tenant (or lessee) to live in his home at a chosen monthly rate. Additional clauses in this agreement can be payment of utilities and the security deposit.
Power of Attorney
Actually, the Power of Attorney is not normally used in a real estate contract. This type of document could be useful if a party is unable to sign the contract. For example, the buyer is not physically in the country to sign. In this case, the buyer can hire another person to act as the power of attorney to sign on his or her behalf.
This type of contract can also be beneficial if you are the property owner of several properties and you are selling or buying yet another office space. Besides Power of Attorney, office movers Miami can lend a helpful hand with expert movers and practical storage units for that stress-free office relocation. Same if you are a caretaker for an older parent or family member who might not be capable of signing the contract.
Contracts are complex and some are written better than others. Find a good lawyer to provide you with well-written contracts, advise you on enforcement issues and represent you in most effective ways.