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|The purchase contract is usually the most important document in any
real estate purchase transaction. This is primarily because, when
properly written, it limits risks for both parties.
Buyers of real estate often put far too little effort into writing a good purchase contract. Inferior contracts can result in insufficient time to perform the desired due diligence, loss of deposit or even a costly lawsuit for specific performance, or the hassle of dealing with problems after closing.
The purchase contract must clearly set out all details of the transaction including various money issues and definition of the timeline for the numerous events that must take place between acceptance by the seller and close of escrow.
A well written contract will provide the buyer with flexibility and options and will result in minimum hassle prior to and after closing. Contingencies, adequate in number and being properly written, are critical to a good contract, as they will provide an investor with the option of walking away with his deposit or renegotiating the price or other terms.
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