How to write a contract to sell a house

Written by lana white
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How to write a contract to sell a house
A contract to sell a house is a legally binding document. (contract 20309 image by pablo from

A contract to sell a house should include a legal description of the property along with details about the price the buyer and seller have agreed upon and the date when ownership of the property will transfer from the seller to the buyer. A contract to sell a house is a legally binding document that assures both the seller and the buyer are aware of and will execute the responsibilities outlined in the transaction.

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  1. 1

    Contract to sell a house forms can be purchased from most office supply stores and from many sources online. Be sure you include every detail discussed between the seller and buyer, if you decide to compose your own contract to sell a house. Start with the simple task of filling in the seller's name, buyer's name, address, home and cell phone numbers, and the address of the property for sale (including city, state and Postcode).

    How to write a contract to sell a house
    You can purchase a real estate contract form or create your own. (form -3 image by Rog999 from
  2. 2

    Include the legal description of the property along with the property address. Go online to the county recorder's office and search by property address or seller's name to find the legal description. Insert the legal description in the contract directly after the property address.

    How to write a contract to sell a house
    Find the property's legal description online. (working place image by Mykola Velychko from
  3. 3

    Clearly state the selling price of the house in numerical form and also write it out. Describe any items that do not convey with the property and all items that are included in the sale of the house. Make sure items like chandeliers, appliances, washer and dryer, window coverings and external items like swing sets, storage sheds and hot tubs are clearly addressed when completing this section of the contract to sell a house.

    How to write a contract to sell a house
    Itemise appliances and other items that are included in the home sale. (let's eat image by easaab from
  4. 4

    Establish the amount of the earnest money deposit the seller expects to accompany the sales contract. Explain how this deposit will be used: applied to the selling price if the sale goes through, retained by seller if the buyer defaults on the contract and returned to the buyer if the seller defaults. Be sure to detail any portion of the earnest money deposit that may be retained by the seller for taking the house off the market if the buyer defaults.

    How to write a contract to sell a house
    Establish the amount of the earnest money deposit. (check book image by Rob Hill from
  5. 5

    Agree to accept an existing survey of the property that the seller may have, or agree that a new survey will be done, usually at the buyer's expense. Include this detail in the contract to sell a house.

  6. 6

    Check with a local real estate agent or lending institution to find out what inspections are routinely expected in your area. Call out any required inspections in this section of the sales contract. Be sure this section of the contract clearly states which party will pay for the inspections and for any repairs that may be discovered in the inspections.

    How to write a contract to sell a house
    Include home inspection details in the sales contract. (maine house image by Earl Robbins from
  7. 7

    Be sure the closing date---the date when money and title to the property exchanges hands from the seller to the buyer and buyer to seller---is included in the contract. Negotiate and include the date for possession of the property, usually at the time of closing.

    How to write a contract to sell a house
    Choose a closing date. (Blue highlighter and day planner image by Jim Mills from
  8. 8

    Negotiate any buyer settlement (closing) costs that the seller may be willing to pay and include this information in the contract to sell a house. Include wording regarding payment of settlement costs on the contract even if each party (seller and buyer) are responsible for their own settlement costs.

  9. 9

    Familiarise yourself with state laws that cover how and when a purchase contract can be terminated. Check your state's website and include specific language in the purchase contract that dictates how each party can terminate the contract and what fee must be paid for doing so.

    How to write a contract to sell a house
    Most states have laws that dictate how a real estate contract can be terminated. (documents in fire - 1 image by Igors Leonovs from
  10. 10

    Use this section of the sales contract to itemise any additional details that are pertinent to the sale of the property but have not been included in another section of the contract.

  11. 11

    Set a time frame within which the seller must respond to the buyer's offer, often one to three days. Make sure both parties understand that until both the buyer and seller sign and date the home sale contract, it is not a completed contract.

  12. 12

    Insert lines for signatures of all buyers and all sellers. Make sure each person also includes the date when they sign the contract.

    How to write a contract to sell a house
    All parties must sign and date the contract. (bisness. image by mashe from
  13. 13

    Include a legally required Real Estate Disclosure form as an addendum to the sales contract. Use this addendum to disclose any details about the house that are not immediately obvious. Be sure to include any damage to the home (even if it has been repaired), any lawsuits or liens on the property, annual property taxes and any remodelling or additions to the home.

  14. 14

    Go to the section of the contract that is affected by any counter offer. Draw a line through the original information and write in the new counter offer details. Make sure both the seller and the buyer place their initials next to each area of the contract where changes occur.

    How to write a contract to sell a house
    Initial and sign any changes to the contract. (signing a contract image by William Berry from

Tips and warnings

  • Earnest money deposits are a way of assuring the buyer is serious about the offer. The deposit is usually substantial enough that the buyer will not want to lose it if he walks away from the contract and the seller feels justified in taking his house off the market. Earnest money amounts are established by the seller and agreed upon by the buyer. Earnest money deposits are often between £650 and £1,950.
  • Possession of the property is a negotiable item. After closing on the house, if the seller remains in the house, he must pay rent to the buyer at an agreed upon rate and length of time. This information must be included in the sales contract under the "possession" clause. It is customary and recommended that the buyer and seller also draw up a separate rental agreement that includes full details of the rental terms.
  • Counter offers can be made on an addendum to the contract instead of initialling changes in the body of the original contract. Counter offer addendums are a good choice if the changes to the original contract are substantial or if the buyer and seller issue more than one counter offer. Too many changes to the body of the contract can make it difficult to read. At the same time, some sellers prefer to make counter offer changes on the body of the original contract because addendums can get separated from the contract.
  • You will need an escrow agent to hold the deposit monies and prepare the settlement costs and closing documents for you. An attorney, title agency, or Realtor can arrange escrow for you. Check to see what method is customary in your state.
  • Inspection requirements may differ from state to state. Some states require a termite inspection that is usually paid for by the seller. The cost of a whole house inspection is sometimes a negotiable item. If the seller has proof an inspection has already been done, but the buyer insists on a new inspection, the buyer may be expected to pay for the new inspection. This is the kind of detail that can sink a contract and should be clearly understood in the language of the contract to sell a home.

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