Different Types Of Real Estate Contracts
Before concluding a real estate transaction, you need to know the various types of contracts, which exist in the market. Are you aware of them and how they work? If you are not aware of them, you should read this post. The following are some basic contracts, which are seen in real estate transactions.
Types of contracts
Lease contract
This particular type of contract comes into play when a person leases out his/her property to earn income. In this agreement, the landlord/landlady specifies that deal agreed with the tenant. This includes security deposit and rent agreed upon by the both parties.
Purchase agreements
These are the agreements you will come across most. In this case, a buyer/seller comes to an agreement before selling the property and handing it offer to another party. Usually, this contract has details of the seller and buyer along with the price, which was agreed and closing date.
Power of attorney
This is an agreement, which you sign to give complete control of the transactions to a person of your choice in the document. This is an important agreement when you are on far away trips or ill. In this case, you will not lose property ownership, but you are allowing a close associate to act on your behalf.
Contract deed
This is one of the risk arrangements of real estate contracts. In this case, you obtai
n a loan from a local money lender on your property. Thus, you provide the original documents of transactions as collateral. Also, the loaner has an advantage over you since the contract will not be processed in your name until you settle the entire amount plus interest. If you default on payments, the lender is allowed to foreclose your property and go away with your documents.
The above are the basic contracts, which are used by both the real estate newbies and veterans. Moreover, it is possible to make contract template that contains terms and conditions agreed upon. You can use the next time you sell or buy a house. In fact, basic knowledge of real estate market does not account too much in handling real estate transactions. This is because significant sums of money are involved. Thus, you are advised to hire an experienced agent to represent you.