There are different types of real estate contracts, and it is important to know that the contracts are necessary for real estate deals. A contract is a legally enforceable document between two/more people. The real estate contract consists of an offer, acceptance, consideration, legal capacity, and purpose for the deal.
Take an example of X selling his property to Y. Y makes an offer to X, thereby meeting the first requirement of an offer. X then accepts the offer and therefore, we now have a formal acceptance in place. However, the contract is not yet enforceable.
We will now need consideration, also referred to some sort of value being exchanged between X and Y In this case, X is receiving a promise from Y that she will purchase the property at the purchase price she offered, and X is making a promise to sell the property and transfer the deed over to Y.
A purchase agreement is the most common type of real estate contracts. This agreement specifies the details regarding the sale of the property. It will include the address, the price of the property, names of both the parties, signatures and the closing date.
There are several types of purchase agreements as follows:
State/Association Purchase Agreement
General Purchase Agreement
Property-Specific Purchase Agreement
A Real Estate Assignment Contract is used in wholesale purchase. This could include distressed properties that are secured and then assigned to any another buyer. There are specific terms added to this type of agreement, as the term “assigns” is the common word used to differentiate it as an assignment agreement/contract.
This is a contract that binds a lessee and a lessor to the property. Therefore, the landlord enters into an agreement with the lessee to reside in the home at a specified monthly cost.
While a Power of Attorney is generally not used in a real estate contract, such documents could be used in situations if a party is unable to sign the contract, i.e. party is not physically in the country to sign, or has a mental disability. In this case, the party can hire another party to act as the power of attorney to sign on his or her behalf.