The business of real estate – even in a slow economy with low house prices like our current state of affairs – is a big one. Real estate transactions happen every day, and a lot of people need to take out loans just to pay for one purchase. That’s because real estate deals with land and living property that is so valuable that entire documents need to be drafted just to ensure a proper transferal. In other words, there are no “receipts” when it comes to real estate – it’s all about the quality of the contracts you have signed.
If you don’t know a lot about real estate documents but are thinking about buying a home or similar property, then it’s time to learn about five real estate documents that should give you your bearings. These documents are all part of the normal routine of real estate, of course, but they’re pieces of legal paper that you’ll certainly want to know in and out. So without further ado, here are five real estate documents you’d better understand.
- 1. Lease agreements.
Lease agreements and renter’s agreements are crucial to making sure that both parties are responsible and accountable. If you own a piece of property and you want to rent it out, you’d better have an ironclad rental agreement ready to go. If you’re looking to find a stable place to live, you’d better have a copy of that lease agreement.
Structurally, these agreements are not very difficult or complex, but you will want to know what goes into them. Most of the language focuses on the rights and responsibilities of both parties involved – so make sure you know these before you sign.
- 2. Land contracts.
Whether your state calls it a “contract for deed” or something else, there’s a lot you’ll need to know about these agreements if you’re going to buy a piece of land. They will typically make sure that you’re guaranteed certain rights as a purchaser, which means there are responsibilities to fulfill if you’re the seller. Before you make a purchase, be sure that you understand everything there is to know about a land contract, and you’ll feel a lot better about your investment.
3. Purchase offers.
Also known as “offers for purchase,” – a subtle difference indeed – offers for purchase are good ways to put your offer in writing. In fact, that’s all they do: they help you establish your purchase offer price and let the seller know that you’re serious about buying their piece of real estate. Before you draft one of these, you’ll want to be sure that you can actually afford the purchase – you should have a loan amount approved by a bank in order to make the purchase offer.
4. Commercial leases.
If you lease an apartment, it’s pretty straightforward. So it is with the commercial lease, in which you agree to occupy an office space for a predetermined amount of time. Make sure you know what you’re getting your business into before you get started.
5. Quitclaim deeds.
These deeds are not often used between two parties in real estate, but they can be used in real estate between family members and people with their businesses. Essentially, they’re quick and easy ways to transfer real estate, but with no guarantees, they don’t really belong in many two-party real estate transactions.