Buying and selling real estate is an exciting and significant process in anyone’s life. That is why before handing over the keys or making any kind of payment, it is essential to have a sales contract that clearly reflects the terms of the agreement between the seller and the buyer. The following is a step-by-step guide on how to draft this crucial document, highlighting the key points to consider.
What is a real estate purchase agreement and what is its function?
A real estate purchase contract is a legal document that establishes the terms and conditions of the sale of real estate. Invariably, the signing and drafting of this contract must be done before a notary public since it must be registered in the Public Registry of Property of the respective municipality or city hall.
The function of the sales contract is to protect the rights of the parties involved, and it is also necessary to document the transaction and use it as evidence in case there are disputes or problems in the future. It is important to read the contract carefully before signing it and consult with an attorney if you have any questions or concerns.
And what is a promise of sale contract?
On the other hand, there is the contract of promise of sale, a private document that is executed so that the “promissory buyer” PROMISES the “promissory seller” that he will buy a certain property on a stipulated date and for a stipulated amount. It is important to emphasize that this document is not registered before any authority since it does not constitute the alienation of any real estate.
Points that should not be missing in the drafting of the sales contract
- Property details: Include the full address of the property, with necessary legal details.
- Data of the parties involved: Indicates names and addresses of the buyer and the seller.
- Price and conditions of purchase: Specifies the price of the property and the conditions of the transaction.
- Closing date and associated costs: Establishes the contract closing date and related costs.
- Taxes and other costs: Details taxes and other costs, specifying who bears them.
- Additional items: Includes any additional items, such as furniture or appliances.
- Property Information: Reports hazardous materials, if any, on the property.
- Contingencies: Details any contingencies that may affect the sale.
What is included in the clauses of a sales contract?
In a real estate purchase contract, the clauses establish conditions and details crucial to the transaction. One of the most important clauses is the one entitled object and consent, usually stipulated within the first clauses of the purchase contract, and stipulates the desire of both parties to commit to this transaction.
On the other hand, we find equally relevant clauses such as the price of the property, which details the agreed currency and the value of the property under negotiation. For those who opt for financing through mortgage loans, the credit clause becomes relevant by stipulating specific conditions on the loan, including the creation of mortgages and associated prohibitions.
The place and date of delivery of the property are essential elements that must be clearly defined in the contract. While the expenses clause establishes the manner in which the costs related to the sale and purchase process will be distributed.
The specification of taxes is crucial to determine the amounts payable for tax liabilities and legal fees. Finally, the clause that addresses the characteristics of the property provides a detailed profile of the property, including location, dimensions, built-up and additional areas, thus providing a complete and accurate description of the real estate in question. These clauses, among others, are fundamental to guarantee a transparent and effective agreement between the parties involved.
Other relevant aspects to complete a sales contract
In addition to the clauses, it is advisable that the purchase contract includes a presentation and additional declarations.
- Presentation: mention what type of contract is being entered into, the names of the parties involved, the date and place.
- Declarations: these are voluntary statements about the sale and purchase. The seller accepts that the property is theirs and is in optimal conditions to be sold. For its part, the buyer accepts that it has the legal and economic capacity to make the purchase.
It is important to note that signing a real estate purchase contract implies that the property legally changes hands, and both parties are obliged to comply with the agreed clauses. This document is essential to protect both parties in case of non-compliance.
Still have questions about how to create a secure and effective sales contract for your transaction? Remember that in Nolab we have specialists in the promotion and marketing of your luxury property in high value areas such as Polanco, Roma, Condesa, Bosques de las Lomas, Lomas de Chapultepec and more. Contact us and get all the information.
