The Purchase Contract
In order to have an enforceable contract to purchase real property it must be in writing, describe the property, contain the terms of sale (e.g., price and payment), provide for a specific closing date and be signed by both the buyer and seller. This agreement is commonly known as the Purchase Contract and is the most important document in the entire transaction.
In typical real estate transactions, the parties will enter into a “binder” that is designed to hold the property from sale to another while the attorneys prepare a more formal contract. In some cases, the attorneys may deem this binder. The binder and contract will address many terms of the transaction including the price, the type of mortgage loan (e.g. conventional, VA, FHA, etc.) the buyers will need as a condition of purchasing (i.e., the “contingency clause”), and how long they will have to obtain a commitment from a lender to provide such a mortgage. Other items include the date of occupancy, the type and effect of inspections to be done, and the responsibility for loss in the event of catastrophic damage to the property.