Before going through with a real
estate transaction, ask yourself if you know about the different types
of contracts that exist in the market. Do you know how they work? If
your answer is no, then you should definitely read this article. Below
are some of the basic contracts that are usually seen in real estate.
1. Lease Contracts
This is a type of agreement that comes into play when an individual leases out their spare property
to earn extra income. In a lease agreement, the landlord specifies the
deal that they have agreed upon with the lessee (tenant), which includes
the rent and the security deposit agreed upon by both parties.
2. Power Of Attorney
Power
Of Attorney is an agreement that you sign when you give complete
control of your transactions to a person of choice named in the
document. This comes when you are ill or when you on a business trip
halfway across the world. Note that, you will not lose the ownership of
the properties, you are only allowing a close associate act in your absence.
3. Purchase Agreements
Purchase
Agreements are the ones you see the most. This is when a buyer/seller
comes to an understanding before disposing off of their property and
handing it over to the other party. This contract will have details of
the buyer and seller along with the price that was agreed upon and the
closing date of the deal.
4. Contract Deed
A Contract Deed is the riskiest arrangement of all real estate
contracts. This is where you obtain a loan on your property from a
local money lender, by offering the original documents as collateral.
This is also where the loaner has complete advantage over you as the
contract will not be transferred to your name, until the entire amount
is repaid with interest. Defaulting on any payments would mean that the
lender can foreclose your house and walk away with the documents.
These
are the basic contracts that are most used by both veterans and real
estate newbies. You can also make a contract template with terms and
conditions you agree with, and just use it the next time you buy or sell
a house. Overall, a basic knowledge of the real estate market does not
account too much when you are handling a real estate transaction as it
involves considerable sums of money. Which is why, you should probably
hire an agent to represent you.
My name is Goutam Kumar. I'm a
Senior SEO Executive at LandLinker.in, India's first real estate portal
with exclusive focus on apartments. I provide tips and how-to's on
property investment, real estate basics, and community living. For more
property-related information, visit
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