When you sell a duplex, triplex, fourplex or single-family home in California, your real estate agent will put together a contract that protects you and the buyer. The contract, once signed, will become a legally binding agreement between you and the investor who buys your property.
So what goes into a purchase contract, and how does it work? Here’s what you need to know.
California Home Purchase Contracts for Duplexes, Triplexes, Fourplexes and Single-Family Homes
A real estate contract, once signed, is a legally binding agreement between two or more parties for the exchange or purchase of a home. They’re designed to protect you and the buyer, and if either of you violates the terms of the contracts, the other party can take the offending party to court.
In order for a real estate contract to be enforceable, it must typically include:
- An offer. One party makes an offer for the property. The offer will include the price the buyer is willing to pay, what concessions he or she wants, and other important information. (It’s up to you whether to accept any offer.)
- If you accept an offer, you’ll sign a statement saying so. (If you reject an offer, you simply don’t sign it – if you don’t sign it, it’s not a contract; it’s just a signed piece of paper that another person gave you.)
- A consideration is something of value exchanged between two parties. Consideration is, for the most part, just money. It’s the money the buyer is willing to pay to purchase your duplex, triplex or fourplex.
- Legal capacity. All the parties involved in the transaction must be legally eligible to enter into a contract. For example, people who are too young to sign contracts or who are mentally impaired cannot enter into a real estate purchase contract.
- Legality of purpose. No real estate contract can call for illegal action.
Common Real Estate Contracts for Multifamily and Single-Family Properties
The most common types of real estate contracts are purchase agreements. In a purchase agreement, all the pertinent information gets coverage, including:
- The identities of all involved parties
- A description of the property
- A description of the condition of the real estate property
- Purchase price
- Obligations and rights of all parties
- A list of contingencies (conditions that must be met to complete the transaction)
- A list of fixtures in the home (such as appliances)
- The amount of the earnest money deposit
- The type of deed that’s changing hands
- A list of closing costs and designations of responsibility for those costs
- Terms of possession
- Closing date
- Signatures from all involved parties