Seller: all of the owners of the property must
be listed and sign the contract.
Buyer: The parties listed are the ones liable on the contract.
If the buyer adds "and/or Assigns" after his name
the buyer may then have the right to sell the purchase contract
to another buyer. Contracts are considered assignable unless
they specifically provide otherwise.
Conveyance: Standard contracts provide for the
seller to convey the property to the buyer by warranty deed.
There are, however, three types of deeds.
Warranty Deed: the seller warrants (guarantees)
that he is conveying full title to the buyer. The buyer should
usually insist upon this.
Special Warranty Deed: the seller warrants that
he is conveying title in the state that he received it to
the buyer. This is usually used when the seller obtained title
through foreclosure and does not want to guarantee that the
foreclosure itself was free from defects,
which it often is not.
Quit Claim Deed: the seller releases his interest in the property
to the buyer. This does not state that the seller had any
interest to begin with, however, just that he doesn't anymore.
This is considered to be an officially "suspicious"
source of title in south Florida. Note that quit claim deeds
are legitimately used to extinguish potential interests such
heirs when purchasing from an estate. The buyer should also
note that if he gets title insurance, the type of deed is
more the title insurer's problem then his.
Agreement for Deed: There is no such thing in Florida, which
is why it says there are three types of deeds above. The idea
of an agreement for deed is that the buyer pays for the property
in installments but does not get a deed from the seller until
the last payment is made. In Florida, the courts will reform
any such attempted arrangement into a deed with a seller mortgage,
and direct the seller to the foreclosure clerk. Seller's seeking
to do this are relying on the buyer's gullibility, and might
consider a lease-option instead.
Property Description: the contract must describe
the property so that it can be positively identified. The
legal description is preferable to just a street address.
Most legal descriptions follow this form Lot ___, Block _____,
Plat Name, Plat Book ___, Page ____. The plat book and page
are often presented together separated by a dash. If you are
not sure of the legal description, have your real estate attorney
look it up for you rather than have a potentially unenforceable
contract. The other type of legal description is called "metes
and bounds" and consists of a surveyors description of
the property. It is very likely that you will not be able
to copy such a description with out making a mistake, so make
a copy if it and attach it as an addendum.
Purchase Price: In the purchase price section
of the contract the buyer usually specifies his financing
contingencies. Possible options are: new financing, cash contract,
seller financing, assuming an existing mortgage, and taking
subject to an existing mortgage.
New Financing: the buyer states not only the
amount of the mortgage he seeks but may also specify the minimum
terms. If the buyer does not obtain a mortgage commitment
in the amount and terms on the contract, he may rescind the
contract and be entitled to the return of his entire deposit.
The paragraph providing for this is often titled "Mortgage
Application and Qualification," and is one of the biggest
"escape clauses in the contract. This provision typically
states that if the buyer hasn't obtained a written loan commitment,
which a pre-qualification is not, within a certain period
of time, either party may rescind the contract, and the buyer
recover his entire deposit. [..cont..]
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