A real estate purchase contract is a signed agreement for the sale or purchase of real property. It provides each party duties, responsibilities and rights regarding the sale or purchase of the real property. Real estate purchase contract disputes typically arise after the contract has been signed by both parties, but before the entire transaction has been completed.
Purchase agreements contain terms that both parties agree to follow and conditions that the parties agree to meet, such as:
- Legal description of the property
- Purchase price
- Closing date
- Items included in the sale, such as appliances, carpeting, and lighting fixtures
- Items not included in the sale
- Clear title
- Condition of the property
- Type of deed being transferred
Either party can breach the real estate contract if they fail to follow the conditions and terms of the contract.
A dispute over closing costs is a type of contract dispute that involves the negotiated price of the real estate property. The disputes that may arise include:
- Loan fraud
- Conflicts regarding good faith estimates
- Misrepresentation of contract terms
- Dispute over which local laws apply to the purchase contract
Other disputes typically involve failing to complete contingencies that must be met prior to the completion of the sale, such as:
- Getting a specific type of financing
- Inspecting the property prior to the buyer taking possession of it
- Buyer selling another property by a certain date
How parties are allowed to resolve disputes are outlined in the contract. In general, real estate contract disputes are normally resolved by:
- Arbitration: An arbitrator, not a court officer such as a judge, resolves the dispute. If the contract includes the term “binding arbitration,” both parties are bound by the decision of the arbitrator.
- Mediation: The process involves a third party called a mediator, who assists the parties in reaching a mutual agreement.
- Small Claims Court: One party sues in county court for a comparably small amount of money.
Yes, a real estate purchase contract is complex. To resolve any potential or actual disputes, contact a real estate attorney.