Welcome back to the second part of our two-part series on real estate contracts today we're going to talk about the Steps to Execute a Real Estate contract:

Step 1: Offer and Negotiation

Once a buyer makes an offer, the seller has the opportunity to accept, reject, or counter the offer. During this phase, both parties may negotiate on price, contingencies, or other terms. Once an agreement is reached, the contract is drawn up.

Step 2: Signing the Contract

After both parties agree to the terms, they will sign the contract, making it a binding document. Each party should have their legal counsel or real estate agent review the terms before signing to ensure everything is in order.

Step 3: Fulfill Contingencies

If the contract includes contingencies, such as a home inspection or securing financing, these must be fulfilled before moving forward. If any contingency is not met, the contract may need to be renegotiated or canceled.

Step 4: Escrow Period

The contract specifies an escrow period, which is the time between signing the agreement and closing the deal. During this time, the title search is conducted, the property is appraised, and both parties prepare for closing.

Step 5: Closing the Deal

On the agreed-upon closing date, both parties meet to finalize the transaction. The buyer pays the purchase price, and the seller transfers the deed to the property. Both parties sign closing documents, and the title officially transfers to the buyer.

Common Pitfalls to Avoid

While real estate contracts are meant to protect both parties, there are common pitfalls you should avoid:

Skipping the Fine Print: Always read the contract thoroughly, or have your real estate agent or attorney review it to ensure no critical details are overlooked.
Not Meeting Deadlines: The contract will include specific deadlines for contingencies and closing. Missing these dates can delay the transaction or lead to the deal falling through.
Overlooking Contingencies: Don’t underestimate the importance of contingencies. Ensure you have clauses that protect your interests, such as the ability to back out if you can’t secure financing or if the home inspection reveals significant issues.

Final Thoughts

A real estate contract is the foundation of a successful property transaction. It provides a legal framework that ensures both the buyer and seller have clearly defined roles and expectations. Working closely with your real estate agent will help ensure the contract meets your needs and is executed smoothly. With the right knowledge and preparation, navigating a real estate contract can be a seamless part of your home buying or selling journey.

If you have any questions about real estate contracts or need expert assistance, feel free to contact me today. I'm here to guide you through every step of your real estate journey! I'm Brian Whistler realtor and I help people buy and sell homes in Oregon and Washington.