When property is sold in Minnesota, a written real estate contract is used. A contract is a conveyance of real estate between two or more parties and is legally binding. In the United States, real estate contracts must be in writing. It is important to understand what the contract represents, the importance, and how it represents both parties.
Real Estate Contract Both parties must be identified and of legal age and mentally competent. If a Real Estate Agent is involved they will also be listed in the contract. A price is defined (or consideration) in the contract, and the property information is also included. The contract must be written so that it is legally binding. Both parties must agree and sign to the terms of the contract. A real estate contract is, in large part, a great way to protect the buyer and seller. In most cases, the offering party will create the contract, sign it and submit it to the seller. The offer can then be accepted, rejected, or it can also expire. An offer can also be withdrawn.
The real estate contract is not to be confused with a deed, the contract does not usually transfer ownership by itself. Liens against the title should be mentioned early on, and noted in the real estate contract. If the financial deficiencies aren’t listed on the real estate contract you could imagine what would happen. The party would back out before the closing. If the lien(s) still have not cleared by closing the deed should have it noted so.
Contingency Most real estate contracts contain contingencies. A contingency allows either party to specify conditions that must be met. There are many different types of contingencies, mortgage, inspection, appraisal, kick out contingencies. We will go into detail about these at a later date. Few people can afford to go without adding at least one contingency to the real estate contract.
Closing A closing date is typically included in the real estate contract. Usually the property transfer takes place at the time of the closing unless you change the contract. You can add a provision that will stipulate a different date if you so choose. Who pays the closing cost fees can also be defined in the contract. If it is not included one party or another will have to pay, which party depends on your location, laws, and any other agreements.
Jeff Torf is a licensed real estate agent for more than 2 years and has been writing articles for brainerdlistings.com. Please check out the site for more information on Brainerd Real Estate.
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