CONTRACT OF SALES
Definition of ‘Contract of Sale’
A Real Estate Sale Contract functions as a legally binding agreement between two parties concerning the terms of purchase or transfer or real property.
Understanding Real Estate Contract of Sale
The main purpose of real estate sale contract is to outline the obligations of both parties entering an agreement to buy/sell/transfer a property. This is the main difference between a contract of sale and purchase of real estate and deed; the latter represents the actual transfer of a property from one party to another, or the closing step of a transaction.
Some contracts of sale can be very simple, functioning like a memorandum of sale, while others provide more details, such as an official description of the property including its address, the agreed selling price, the mortgagee details (when applicable), the deposit amount, and the agreed closing date, the maximum time it is valid before a counter-offer can be accepted, and the possible legal proceedings should the contract be broken.
The contract of sale is different for every type of real estate: residential, commercial, or vacant land.