Real Estate Forms, An Added Clause for Your Protection

Nowadays, more and more people are opting to conduct real estate transactions without the aid of real estate professionals. With so much information and resources available on the internet, a lot of people are now realizing that real estate transactions are not that difficult and gladly take on this challenge.

Generally, all the forms needed to facilitate and legalize real estate sales and purchases can be purchased and downloaded from the internet. Standard forms covering lead-disclosure, offers to purchase, counter-offers, and even purchase agreements are easily available to all users. Owners selling their homes by themselves need only to plug in their credit card details and these general forms will be in their hands.

With reference to the contracts (offer to purchase, counter offer and purchase agreement), the format and contents are fairly standard. However, since the documents can be viewed and opened using any word processing program, you can modify the contents to suit your requirements.

When you are preparing the Purchase Agreement, make sure that you read everything carefully and look for a clause which will protect you in case the buyer changes his mind about buying your property midway through the entire process. Normally, this clause can be found almost at the end of the entire document and acceptable events and circumstances are written down. If you want to add or remove certain events, and maybe include a time frame (i.e. 2 weeks after the contracts have been signed), you can most definitely do so. Just make sure that your conditions are valid by consulting a real estate lawyer.

This protection clause, apart from indicating the acceptable reasons for the buyer to renege on your agreement, should also include a penalty. The penalty, usually in monetary form, is what the buyer is obliged to pay you (the seller) in case he does back out for reasons outside of the ones that have been agreed upon. This amount is different from the down payment he has given which may or may not be returned in case the deal does not push through.

Why is this clause important? Why, simply because it protects you. All contracts should have this clause so that the buyer would take the entire real-estate transaction seriously. It would make the buyer think twice before abandoning the project and in case he does need to back out of the deal, you would be (somewhat) compensated for the time and effort you have put into the failed transaction.

If the real estate contract you have does not include this clause, go to your real estate lawyer and have him prepare this for you. Ask if the additional conditions you have thought of can be included and if some of the reasons already stated can be removed. Talk to your lawyer about the other acceptable reasons for pulling out of the deal and what the standard penalty rates are. The rates may be a flat rate (according to your own estimation), based on prevailing real estate standards / practices and may even be a small percentage of the total cost of the property being sold.

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