Different Types of Real Estate Contracts
As in all legal transactions, contracts are a must when executing a real estate sale. When buying and selling all real estate, there are all types of contracts that are used depending on what stage of negotiation you're in. Some of these contracts are unique to the buyer or seller, while other contracts are shared and signed by both the buyer and seller. However, the laws and the contracts required for real estate transactions  may vary from state to state. It is always wise and recommended to hire an attorney before signing any legal documents. Below are some of the different types of contracts that you will run into when buying and selling real estate:
1. Exclusive Right to Sell Contracts
Licensed real estate sales associates are often used in real estate transactions. The buyer and seller in the transaction usually obtain separate real estate agents to represent them. When signing with a real estate agent, the seller typically signs a contract that is called an Exclusive Right to Sell Contract. This agreement gives the real estate sales associate the exclusive rights to list and sell the home. A buyer often signs what is called an Exclusive Buyer Agency Contract, which requires the buyer to exclusively use the signed agent to purchase their home.
2. Seller's Disclosure Contracts
By law in Florida, the seller must complete what is referred to as the Seller's Disclosure and Condition of Property Addendum. This contract divulges specific details about the home to prospective buyers. These details outline the defects and physical problems with the house that the seller is aware of. Sellers are required to answer questions regarding the age of the home, the roof and the HVAC system. Foundation problems, pest infestations and problems with the land must be disclosed in this type of contract. This is like the car lemon law that a lot of states have, but it is for houses.
3. Lead-Based Paint
Federal laws require sellers to complete a Lead-Based Paint Disclosure contract for homes built prior to the year of 1978. The seller must disclose any knowledge of lead-based paint that may have been used in the home. Both the prospective buyer and seller fill out and sign this type contract.
4. Sale Contract
When a buyer is ready to make an offer on a prospective property, a sales contract is then started. In this type of contract, the seller indicates what items will be included and excluded from the sale. For example, the seller may want to include certain appliances, but exclude others. Both the buyer and the seller approve and sign this type of contract.
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