Becoming familiar with the components of a contract before you have one presented to you puts you in a better position when it comes time to negotiate one.

What are the Components of a Contract
Although there will be some variance based on the location of your residence, most Real Estate contracts contain most or all of the following items:

The Sales Contract: What It Includes 

• What: A legal description of the property as well as the street address.
• How much: The selling price.
• Deposit: How much money accompanies the contract and who will hold it.
• Closing: When and where.
• Inclusions and exclusions: What is and is not included in the sale of the property.
• Home inspection: Contingency for and to be done in X number of days.
• Warranties: Any that are included with the house and description of the warranty.
• Condominium: If the property is a condo, other provisions will apply.
• Well and Septic: If applicable, they must be tested (and pass).
• Termite and Pest inspection: Who will pay and if there is infestation or damage, who will repair.
• Possession Date: When the buyers take possession of the house--before, at or after closing.
• Acceptance: How long the sellers have to respond to the offer with either acceptance or a counter-offer.
• Arbitration: Any provisions for arbitration of disputes.
• Insurance: Whose insurance covers the property up until the closing date.
• Property Disclosures: Notices of any property disclosures concerning the house.

The exact wording of the sales contract will vary from locality to locality (and sometimes even within localities), but by being prepared to see at least the items listed above, you will be in a better position when a contract is presented to you.

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