A real estate contract is a contract for the purchase/sale, exchange, or other conveyance of real estate between parties. Real estate contracts are typically bilateral contracts and should have the legal requirements specified by contract law in general and should also be in writing to be enforceable. Real estate contracts are governed by federal statutes and state which makes it a binding legal document. Contracts are always needed as a basis of any transaction. There are different, a ton, of types of contracts, however, all contracts mean the same, so every contract must contain the following items:

1. Names of the parties to the contract.

The names of the property’s seller and buyer must both be annotated on the contract. First, middle and last names of the parties should all be included and must be spelled correctly for the sake of property title. It’s much easier to change or correct a name on the contract than it is to later change an already executed title document.

2. Mutual assent.

This contains the actual agreement that was reached between the parties, along with any contingencies made a part of the transaction moving to conclusion. The mutual assent must directly state that the two parties have indeed reached an agreement on a purchase price for the property, and wording must be satisfactory to both.

3. The property’s purchase price.

The price as agreed upon by the parties must be identified in the contract, and should be written out both in longhand and in number form. The amount listed is the price of the property only and should not include any fees or other charges paid during escrow.

4. Location and legal description of the property.

The description and location of the property are both vital, again for the sake of transference of a proper and clear title. The property’s description must be of the legal variety to avoid any ambiguities, and be as detailed as possible so that there can be no question about the identity of the property being sold.

5. Consideration.

The consideration is the benefit derived from the agreement made between the two parties. For the buyer, the consideration is the property that he or she will receive from the seller. For the seller, the consideration is the purchase price that will be paid by the buyer.

6. Signatures of all those that are party to the agreement.

Of course, a contract is not legally binding without the proper signatures. As such, a party’s signature implies agreement with the contract and all of its terms.