Real Estate Investing Information » Essential Contract Clauses

Essential Contract Clauses

Congratulations! You just purchased that new home learn course. You followed the commands. You found a fine deal. You there your contract to the listing broker and you get laughed at!

The certainty is, real estate brokers don't like "seminar" forms. They are relaxed using the "standard" agreement, although the standard agreement is usually drafted to protect the real estate broker, not you.

You must study how to take any "standard" agreement and modify it to your liking. The following are some necessary clauses I use when buying a property:

“And/or assigns” or “and/or Nominees”

As the buyer, you want to have the right to allocate your contract. By placing your name with the words, “and/or assigns,” you routinely give yourself that right. The words, “and/or nominees” is not as broad, but it has been interpreted as giving the buyer the correct to place title in the name of a trust

Inspection Clause

Have the right to make the agreement contingent upon your right to do a thorough inspection before a positive date. Make certain that you are not required to hire a expert inspector and that the inspection clause permits you to cancel the agreement if there are things wrong with the assets which the seller is not willing to fix or decrease the price.

Choice of Escrow Company

As the buyer, persist on the right to choose the title or escrow company so that you stay in control. A conservative or uncooperative escrow or title company can make life extremely difficult if you are trying to do a creative deal.

Right to Extend

Most contracts call for a date sure for closing, using the words, “on or before”. If the buyer is not prepared to close by said date, the seller can hold him in default. If you want to buy more time, make the final date “on or about”. What does “on or about” mean? I’m not sure, but it surely means LATER than on or BEFORE!