Yes, the excitement that comes with your first property sale or purchase can be rather euphoric. To most investors, it is that very first sale that gets them into the property game. As soon as you see that money hit your bank account and you realise that you made a profit from a system that you can simply rinse and repeat, there is a very good chance that you will get addicted.
Soon you will find yourself scouring the planet for better, bigger property deals. To ensure that you do not get burned, on the first or any consequent deals, here is a short list of what you must have in a property contract.
1: The proper names and dates
Most investors will tell you that you can simply write down ‘and/or nominees’ on the contract if you are not sure about which names to include. The problem with this is that once the contract is signed, changing this part of it will require an entirely new contract after termination of the existing one and a mutual agreement by the parties involved to create a new contract.
It is a whole lot of problems. It is often just best to start things off in the right way and include the proper names of all parties involved as well as the dates of contract execution.
2. The right property address
Although this might seem like an obvious inclusion considering the fact that you are buying or selling a physical commodity that has a specific address, it is not uncommon for mistakes to occur. A small omission like an ‘i’ instead of the number ‘1’ where the property address is concerned could lead to unimaginable legal issues down the line.
This is especially true if you mistake the street number which essentially means that you will be trading in an entirely different piece of property. You need to include a proper description of the property and the right address to ensure that the contract is easily enforceable.
3. The financial arrangements
There is a very good chance that no mistakes will be made where the monetary arrangements are concerned. Mostly because this is why everyone is here; to make money. But just in case you assume that everything discussed stands, you need to include the agreements in the contract. This will ensure that you get paid in the exact way as discussed and agreed upon by the parties. Be sure to outline the financial arrangements very clearly.
As always, you are advised to include a very experienced and professional solicitor to ensure that your contracts are not only well written but also very enforceable and in alignment with your wishes. It is the only way to make sure that all will go swimmingly well on your first property deal. These things can get very complicated quickly and any omissions could end up costing more than you bargain for in the long run. Use a solicitor.Tags: property contract dos and donts, what you must have in property contracts, what you need in a property contract