The Key Elements of a Real Estate Purchase Agreement

One of the biggest reasons to hire a real estate attorney is to ensure you are following the law without leaving out any gaps or loopholes than can leave you vulnerable. The last thing you need is for a court to determine your real estate purchase agreement is void. The contract details the agreed-upon price and terms of purchase for the property in question, including financial issues, important dates, and other mutually accepted details. Here are the five most important aspects of a legally valid real estate purchase agreement and how your real estate attorney can help.

1. Legal Purpose

A contract is invalid if it is intended for an illegal purchase. The details of the contract must be enforceable under current law. For real estate purposes, it is important to make sure the seller is the legal owner, for instance.

2. Competency

It is important to make sure the person signing a real estate purchase agreement with you is allowed to sign a legal contract. Both parties must be at least 18 years of age, of sound mind, and not under the influence of any substances. These rules are in place to protect vulnerable groups like minors and those with disabilities. If there is any doubt in your mind about the capacity of the other party, it is important to do your due diligence in determining competency before you sign anything.

3. Agreement by Offer and Acceptance

In real estate purchase agreements, this is illustrated by an offer of purchase by the buyer and an acceptance of the offer by the seller. The best way to ensure the binding legality of this agreement is to write out all the terms of the purchase agreement in full. If the buyer is offering a price with specific conditions attached, the seller must sign that they accept the price and the conditions. If something is not listed in the purchase agreement, there is no legal standing to enforce that agreement.

4. Consideration

In legal terms, consideration is anything of value that is offered and exchanged in a contract: money, goods, services, etc. Typically with real estate agreements, the consideration is in the form of money. While the down payment and financing details will come at closing, earnest money can be included in the agreement from the beginning.

5. Consent

Both parties in a contract must enter into agreement knowingly and of their own free will. Any fraud, misrepresentation, or duress from any party in the contract will make the agreement null and void. Even a simple mistake can void a contract if it goes against the agreed-upon terms. All parties involved in the signing of a contract must agree to the deal.

Your real estate attorney can ensure the real estate contract you sign is binding, valid, and enforceable under New Jersey law. If you are unsure about the legality of a contract or if your interests are being protected, Veitengruber Law can help.

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