Whaddup Bigger Pockets!
Still a newbie investor and looking to see what clauses I need. I have the basic purchase and sale agreements. Actually a few different ones trying to decide which one is better without having to throw down the 600-1000 whatever a attorney would charge to review since I dont have that money. I live in New Jersey FYI! If you have a recommendation on what contracts to you Id really appreciate it or if you have clauses I could use Id appreciate to make sure Im safe incase I cant find a buyer, show the buyer the property and all that jazz. Here are some of the clauses I was thinking of adding to it. Let me know what you guys think.
1. Property is sold as-is. This is a net to seller contract. Buyer pays all closing costs
2. Seller must pay for any unknown liens and taxes. Seller must pass free and clear title
3. If not this deal is null and void. Buyer has the right to assign property. Buyer will have 30 business days to close this property upon sellers acceptance.
Any response would be nice.
I always recommend that buyers use the same language that is on the purchase agreement forms used by licensed real estate agents. All you need to do is to submit one offer through and agent and you now have a photocopy of the offer that you can copy the verbiage.
Regarding your clauses, well...
#1 This will make buyers nervous. First question in their mind is "What is wrong with it." All property is already being sold As Is and so it seems redundant to place that statement in the contract.
#2 This is also a redundant clause. A property cannot legally transfer without paying off liens such as mortgages. If you see the need to bypass title insurance (which will insure that the property is free and clear of encumbrances and liens), I would recommend that you state that the property must transfer on a Warranty Deed. Problem solved.
#3 First sentence seems to go with #2. The assignment clause will make all REO listings out of reach. REO owners/lenders do not allow assignment. Some say that "The offer is contingent to the approval of the buyer's partner. Written approval will be provided within XX days." Your partner is your end buyer.
Just my thoughts.
I presume you are a buyer in this contract. Contracts as a buyer and as a seller often have different terms.
Note that 1 & 2 conflict. Net to the seller means you are paying any back taxes or liens to clear up title witch is in direct conflict with #2
#3. "If not" what ? What do you mean by "If Not?" Contracts need to be clear and very specific.
If you don't have $600 - $1000 to have a contract reviewed you probably are not ready to do any real estate investing. While I have never had a real estate purchase and sale agreement reviewed by an attorney; I have spent a lot of time reading legal text books. I have also had many other types of contracts review by attorneys.
@Simon Campbell I actually took those out and re did them after I educated my self about the ones that I should and shouldn't have but thanks again for the reply.
@Ned Carey I have as much as it takes to spend on this but Im on a budget and not looking to drop a 1k on just a attorney. I need it more like direct mails and marketing shenanigans. I redid my clauses to perfect I believe. All you need is a title company to close for you correct?
Originally posted by @Felix Wisniewski :
but Im on a budget and not looking to drop a 1k on just a attorney.
It shouldn't cost $1K to have an attorney review a contract. You are working with the wrong attorney if it is that much. (unless you are talking a large commercial deal which probably should cost you that much or more.)
All you need is a title company to close for you correct?
Basically yes. Once you have a property under contract you give it to a title company and they take care of the details of closing.
Originally posted by @Felix Wisniewski :
I actually took those out and re did them after I educated my self about the ones that I should and shouldn't have but thanks again for the reply.
That is what makes BP such a great forum. There are so many resources here to answer your questions. Plus, I agree that paying hundreds of dollars to have a contract reviewed hurts the pocketbook and can seen unnecessary depending on the transaction. Good luck on the transaction.
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