The function of a sales contract is to identify the property being sold, name the buyer and seller, state the amount of money the buyer will pay, and the date when title to the property will be exchanged for the money.

At first sight, a sales contract can look complex, but it consists of standard clauses that, with a little effort, are individually easy to understand.  Twenty minutes spent with a blank real estate contract will go a long way towards making you comfortable with examining a Buyer's offer. At a minimum, you will recognize non-standard terms.  As always, if you have questions or concerns about the sales contract or related forms we recommend you seek legal advice.

The bulk of pages in a sales contract are written to answer questions such as: What happens if the buyer doesn't have the money to purchase the house on the agreed date? Or what if the seller refuses to fix the leaking roof? The difference between a five page contract and a ten page contract is the longer contract covers these "what if" questions or contingencies in greater detail. 

  Things to watch for:
– Purchase contingent on sale of buyer's home.

– Excessive time for buyer to get financing.

– Low earnest money deposit.

– Penalty if seller can't move by specified date.  

  Make Sure:  
– The Buyer has been pre-approved or at least pre-qualified for a mortgage big
enough to buy your home.

– Do not sign the offer until the Buyer has been pre-qualified.  

  Again, it is very important to obtain proof of funding information in writing before you accept an offer and execute a sales contract.

  More on Real Estate Offers and Contracts»