What Is an Executed Contract in Real Estate?
A mountain of paperwork varies hands over the course of a property transaction. The most important of this documents is the agreement of sale, which is the contract that obligates the seller to transfer ownership of their property to the purchaser in exchange for payment of the purchase price. At what point the contract is implemented depends on your meaning of the period.
A contract is said to have been executed when both parties have completed their obligations. In the case of a property contract, that landmark comes at closing. Until payment and name change hands, the contract is merely “executory” — capable of being executed.
To execute a document means to sign it. People who refer to a implemented property contract actually signify that the record — the newspaper or electronic copy of the contract — was signed. In this way, the date of execution is the date on which all parties’ signatures appear on the contract. It’s the contract’s beginning date.
Elements of a Valid Contract
A contract requires more than signatures to be valid. First, there must be a “meeting of the minds” that indicates reciprocal approval, that is, the purchaser and seller should agree on the purpose and terms of the contract. In California, offer and acceptance of this offer generally constitute evidence of reciprocal approval. Additionally, the parties must trade “consideration,” that is something of value and refers to this property for the purchase price. Ultimately, the purpose of the contract must be legal, and the parties must be capable and of legal age. Although oral contracts can be valid, real estate contracts aren’t enforceable unless they’re written.
Real Estate Sales Contracts
A real estate sales agreement details the parties to this contract and what every person needs to do to close the sale on the date the contract specifies. Among the most essential terms are those stating that the seller must deliver clear name utilizing the type of deed mentioned in the contract in exchange for the stated purchase price. The contract also must include a legal description of this property. Information about the form and amount of financing the purchaser needs also is included, as are deadlines pertaining to repairs, repairs, a mortgage commitment, and entry of any specific documents for that the contract predicts.