The Real Estate Encyclopedia
What Is The Purpose Of A Sales / Purchase Contract?
Category - Home Buying Questions - Buying Legal & Closing FAQ's

Entering into a legal sales contract provides the buyer with the time needed to ascertain that the seller will be able to legally convey title to the property.  For protection, the buyer enters into a written and signed agreement with the seller, promising that the purchase price will be paid only after the title has been searched and found to be in satisfactory condition.  The seller promises to deliver a deed to the buyer when the buyer has paid the money.  The exchange of promises constitutes the legal consideration of the contract.

 

A properly prepared sales contract commits each of the parties to its terms.  It also provides the closing entity, such as the closing attorney the required information to prepare the Warranty Deed, Settlement Statement, conduct title search and provides information to the lender in order to prepare the loan agreement.  Additionally, the contract may be used to ensure performance by either party after the closing, based on agreed to terms to be fulfilled after the closing, clearly stated in the contract. 
 
Category(s)
Home Buying Questions - Buying Legal & Closing FAQ's
Home Buying Questions - General Home Buying FAQ's
Home Selling Questions - General Home Selling FAQ's
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