When you purchase any real property, you will read and sign many contracts. Learning and understanding the essential parts of a real estate sales contract will help you know what to expect to see in each one. If you need a contract drafted, reviewed, modified, or rewritten in compliance with Iowa state laws, contact our firm to see how we can help you.
1. Offer and Acceptance
Having a clear offer and acceptance of that offer is a required element in all contracts, regardless of whether they deal with real estate.
Your sales contract will only be written after you have submitted a clear, unambiguous offer as well as earnest money to the seller. Then, the seller will either accept, reject, or provide a counter-offer. It is only after both the proposal and the acceptance have successfully transpired that the sale will be documented in writing.
2. Vital Information Specific to the Transaction
Under Iowa law, the sales contract for real estate will only be valid if both parties sign it. The agreement will address essential information about the transaction, including:
- Price
- How the price will be paid
- Whether the sale is contingent on any other event (such as the sale of another home or obtaining favorable financing)
- How the title will be transferred
- A detailed description of the real property to be transferred
- Any fixtures or personal property that will be included with the sale of the real estate
- The closing date
- The possession date
- Issues dealing with property taxes
The contract will also include specific information about the buyers and sellers. In particular, the buyers will generally note whether they will take the title as joint tenants or tenants in common. Joint tenants have the right of survivorship, which means that the property will automatically pass to the surviving owner if one owner passes away. On the other hand, tenants in common means each owner has the ability to pass their share of and right to the property on to whomever they want after they pass.
3. Disclosure Requirements
In Iowa, the sales contract is also required to contain certain disclosures about the property. For example, the seller must provide a description of any structural issues that they are reasonably aware of regarding the home.
The seller will provide these disclosures on a statewide form called the Residential Property Seller Disclosure Statement. In addition, any home that was built before 1978 is required by federal law to include an EPA Lead Hazard Disclosure Statement as well.
4. Ownership Rights
The sales contract will also describe certain aspects of the real property that affect ownership. While your real estate attorney will do review the abstract of the property and prepare a title opinion, the sellers should let you know if there are any concerns about the title as well.
Real estate sales contracts are extremely important, and they can be complicated. It is a good idea to have an attorney look them over before you sign. Danilson Law can be a helpful facilitator in your real estate sales contract, so contact our firm today at (515) 512-5500.
