The following items must be included in a legally binding contract to purchase real estate:

1. Identify the parties - seller and purchaser

2. Include property description:

legal description found in court and land records, i.e., lot, block numbers for real property list of personal property (fixtures, furniture, etc.) to be conveyed

3. State the purchase price as a clear and precise price and financing provision

4. Explain deposit and escrow fees and terms (usually 5% or less of the purchase price deposited at the time a contract is executed, and held by a third party or escrow agent, typically forfeited if the property is not settled)

5. Have a provision that the seller is able to give clear title to the purchaser verified at purchaser's cost

6. State the type of deed

7. Spell out the prorated adjustment for taxes, water, etc. and closing costs

8. State the date and place where settlement is to occur

9. Include information on tenancies

10. Include a sellers risk of loss provision, stating the seller is responsible for loss from time of contract executions to deed conveyance.

11. State information on the conditions and operation of the property, for example: sold "as is", protecting the site from unauthorized dumping, etc. and how to address i.e., insurance coverage by purchaser.

12. Include provisions for purchaser's inspections of all aspects of the property, including physical property and bookkeeping.

The Developer Support System. Copyright © 1997 The Enterprise Foundation.

Next: A3. Real Estate Contract Negotiation Points

OHIO CAPITAL CORPORATION FOR HOUSING