Paperwork to Buy and Sell Real Estate

Bonus Module

As a real estate investor preparing to buy or sell your first investment property, understanding the paperwork involved is crucial.

This chapter provides an overview of the essential documents and contracts you'll encounter throughout the transaction process.

From the contract to buy and sell real estate to closing documents and various supporting paperwork, we'll explore the key elements that form the backbone of real estate transactions.

By familiarizing yourself with these documents, you'll be better equipped to navigate the complexities of property transactions and protect your interests as an investor.

Table of Contents

Here’s what’s included in this module:

• Getting Contracts

• Review Paperwork

• Other Common Documents - What they are and why they’re important to real estate investors.

  • Contract to Buy and Sell Real Estate

  • Seller’s Property Disclosure

  • Lead-Based Paint Disclosure

  • Natural Hazard Disclosure

  • Occupancy Limits Disclosure

  • Source of Water Disclosure

  • Square Footage Disclosure

  • Wire Fraud Disclosure

  • Earnest Money Receipt

  • Inspection Objection/Resolution

  • Bill of Sale

• Major Contract Sections - What each section is and why they’re important to real estate investors.

  • Agreement

  • Parties and Property

  • Assignability

  • Inclusions

  • Exclusions

  • Parking/Storage

  • Water/Well Rights

  • Dates and Deadlines

  • Purchase Price/Terms

  • Seller Concessions

  • Earnest Money

  • Good Funds

  • Time of Payment

  • Available Funds

  • New Loan

  • Loan Assumption

  • Seller or Private Financing

  • Financing Conditions and Obligations

  • Appraisal Provisions

  • Homeowner’s Association

  • Title Insurance

  • Record and Off-Record Title Matters

  • Special Taxing and Metro Districts

  • Tax Certificate

  • Third Party Right to Purchase/Approve

  • Right To Object/Resolutions to Title

  • Title Advisory

  • Surveys and ILCs

  • Seller’s Property Disclosure

  • Inspection

  • Damage, Liens, and Indemnity

  • Insurability

  • Due Diligence

  • Source of Water

  • Existing Leases and Tenant Estoppel Statements

  • Lead-Based Paint

  • Carbon Monoxide

  • Meth Disclosure

  • Radon Disclosure

  • Closing and Closing Docs

  • Transfer of Title

  • Payment of Liens and Encumbrances

  • Closing Costs

  • Prorations

  • Possession

  • Damage to Property While Under Contract

  • Right to Walk-Through Property

  • Home Warranty

  • Legal and Tax Counsel

  • Time of Essence

  • Default and Remedies

  • Legal Fees, Costs, and Expenses

  • Mediation

  • Earnest Money Disputes

  • Termination

  • Entire Agreement, Modification, Survival; Successors

  • Notice, Delivery, and Choice of Law

  • Notice of Acceptance

  • Counterparts

  • Good Faith

  • Additional Provisions

  • Other Documents

  • Signatures

  • Agent/Broker Acknowledgements

• Conclusion

Getting Contracts

When you're buying or selling your first investment property, knowing where to get the right contracts and paperwork is key.

• State Real Estate Commissions – In many states, there’s a state real estate commission that provides standardized contracts and disclosures. These documents are approved for use and help ensure consistency and legal compliance in real estate transactions.

• Local Real Estate Associations and Brokerages – In some markets, contracts and disclosures are provided by local real estate associations, brokerages, or legal counsel. These documents often align with state-approved forms but may include small adjustments to accommodate local customs. Typically, these changes are minor and are made to better reflect the specific needs of the area.

• Real Estate Agent/Broker – Your real estate agent or broker will provide or direct you to the appropriate paperwork for buying and selling properties in your local market. Agents are trained to use state-approved contracts correctly, but remember, they are not authorized to give legal advice unless they are also attorneys.

• Custom Contracts for Off-Market Deals – When buying properties outside the Multiple Listing Service (MLS), many investors have their own contracts created by an attorney. It’s often cheaper to modify a standard contract or one from a course you purchase than to create one from scratch. Be cautious of poorly drafted contracts, as they can lead to costly disputes down the line. Spending a little more upfront on a solid contract can save you from significant financial issues later.

  • Different Contracts for Buying and Selling – Some investors use different contracts depending on whether they are buying or selling. These contracts typically include default terms that favor the buyer or seller, based on the role the investor is playing in the transaction.

Review Paperwork

When you're buying or selling your first investment property, reviewing the paperwork is one of the most important steps. Here’s why and how to do it:

• Review All Paperwork Before Looking at Properties - Don’t wait until you find a property to start understanding the paperwork. You should be familiar with the contract and other forms before you make an offer. This helps you avoid surprises later.

• Mark It Up with Questions - Take a copy of the contract, read through it carefully, and make notes with a pen. Highlight sections you don’t understand and write down any questions for your attorney, CPA, and real estate agent. It’s better to ask questions upfront than miss something that could cause problems later.

• Ask Your Real Estate Agent About the Process - In most markets, your real estate agent should be able to guide you through the buying and selling process. They can answer basic questions about the paperwork and help explain how things work.

• Consult the Right Professionals for Legal and Tax Questions - While your real estate agent can be a great resource, they aren’t trained in law or taxes. For legal questions, consult your attorney. For tax questions, talk to your accountant or CPA. This ensures you get accurate advice for your situation.

Other Common Documents

Throughout a real estate transaction, you’ll encounter several key documents that outline critical details, protect your interests, and ensure both parties are clear on their responsibilities.

Below are some of the most important documents you’ll need to understand as a real estate investor.