You’ve probably heard the saying “real estate is a people business,” which is entirely true. The most successful investors know how to network, communicate, and build and maintain relationships. However, there is another side to real estate investing that beginners like to ignore: the legal side.
Understanding the anatomy of any real estate contract is the key to success for any investor (regardless of your experience). While it is important to work with legal professionals throughout the duration of a deal, if you are familiar with the basic in’s and out’s of the most common real estate contracts, you will be ahead of the game.
The In’s And Out’s Of A Real Estate Contract
There are countless contracts that will need to be signed throughout any real estate transaction. However, the four most common for investors include the assignment contract, the offer to purchase agreement, the lease agreement, and the partnership agreement. While each of these agreements has its own unique set of requirements, each will include the following:
- The names of the parties involved
- The sale price of the property and all financing arrangements
- A legal description
- Earnest money details
- Special provisions
Remember, the rules and regulations of each contract will vary by state, so it is important to discuss different requirements with a licensed professional before moving forward with a deal. But to gain a better understanding of an investor’s most common contracts, check out the following: