Brand new real estate investors are always worried about filling out the Sales and Purchase Contract even before they find their first investment property. And I will admit, it seems like a big deal until you have done it a few times.
But the truth of the matter is that folks tend to make it harder than it really is. It's actually a pretty simple and straightforward process. I have made a short video so that you can see first hand just how easy it is. If you plan to “assign the contract”, I have gone over that too.
What Needs to Be Included In a Sales and Purchase Contract?
A basic sales and purchase contract will say that you are buying the property “for this amount of money”. Be sure the dollar amount is correct. Here are some other things that should be included:
- That clear title will be guaranteed
- If the property is being purchased “as is” it needs to state that
- Who will be cleaning out the house (if applicable)
- Permission to put a lock box on the house if it is vacant
- When the utilities will be switched into the new buyer's name
- Any special concessions you are paying for such as closing costs
You need to spell out everything in detail; there should never be any assumptions by either party. I usually re-name my master contract as the name of the property and save it in a file I created called “Offers Submitted” on my computer.
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One Final Tip
As you begin to buy more and more properties, how they have been saved in your computer it will become very important. It will become difficult to find a particular address if you have saved them with the “number” part of the address first such as “1234 Main Street”. Be sure to save them as, “Main Street, 1234”. You want them to show up in alphabetical order. If it is a numbered street, save the file as “22nd Street, 2245 etc. By doing this you will be able to find the paperwork for your properties easily. Your list might look something like this:
- 22nd Street, 2245
- 43rd Street, 612
- Arbor St., 892
- Drake Ave., 12209
- Naomi, 4612
I think you can visualize how much easier it will be to find a particular address especially if you have 50-100 properties in your file.
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