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Contents of a Real Estate Sales Contract

A real estate sale/purchase agreement form (sales contract) is a written agreement between a buyer and seller of real estate. Real estate contracts must be in writing to be enforceable. In the US, the Statute of Frauds requires real estate contracts to be in writing to be enforceable.

The minimal requirements of a real estate sale contract are:

     1. Identify the parties: full names of all parties.

     2. Identify the real estate. This can be as simple as an address but a legal description is preferable.

     3. Identify the purchase price: the amount must be ascertainable from reading the contract.

     4. Include signatures: the contract must be voluntarily signed.

     5. Include a consideration: this is the exchange of something of value, including money. Money is the most common consideration.

     6. Have a legal purpose: the sale of the real estate is a legal purpose, however, the contract can not call for any illegal action.

     7. Involve competent parties: all parties must be mentally capable of sound judgment. Minors can not enter into a real estate contract.

     8. Reflect a meeting of the minds: all parties must agree as to the obligations, details and rights of the contract.

Though the aforementioned are the basic requirements for a real estate sale agreement, a comprehensive sale agreement will also include clauses for earnest money, payment terms, fixtures, prorations and adjustments, closing / settlement, closing costs, recording and transfer taxes, restrictions, easements, financing contingencies, appraisal contingency, buyer and seller responsibilities, property condition, walk through, default, inclusions / exclusions, insurance, leases, title, survey, inspections (termite, home, radon gas, environmental), flood hazard and disclosures.