Real Estate Purchase Contract
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Closing:

In real estate sales, the "Closing" has traditionally meant the time and day when the buyer and seller sign all the final documents such as loan payoffs, deeds, and other final administrative matters to completely consummate the transaction and transfer ownership. The Closing is usually held at a title or escrow company, although this is not required.

Remember, simply signing a Real Estate Purchase Contract ("REPC") is usually just the beginning of the process of transferring real property from one person to another. The REPC is an agreement between the parties that establishes a framework within which the parties can move in an orderly fashion toward the Closing. For example, the REPC sets forth dates by which the seller must make certain disclosures, the dates by which the buyer must obtain an inspection or financing, and other administrative matters before the property is actually transferred. The REPC also establishes the remedies available to each party if the other doesn't do what it agreed to.

Contingencies:

A contingency in a contract means there is some condition that must be met before the purchase goes all the way through to closing. For example, a loan contingency in a real estate purchase contract usually means that even though the buyer and sell have signed the contract, the buyer won't be required to go through with the purchase if he or she is unable to qualify for a loan.

Purchase Price:

The purchase price is the total amount the buyer will pay the seller for the property. The purchase price does not include any closing costs or third party fees.

Legal Description of the Property:

The legal description of the property is how the property is formally identified in governmental records such as those at the county recorder's or assessor's office. You can obtain the legal description of the property by reading it from the deed. If you don't have a copy of the deed handy, you can usually get a copy by calling the county recorder's office where the property is situated and telling the clerk the street address or current owner of the property. Often the clerk will simply read the legal description to you right over the phone if the description isn't too long. Still, it's always best to verify the legal description by double checking it against what is written on the deed.

If you have a copy of the deed, you may also see a tax identification or parcel number just above or below the legal description. It's helpful to include that number along with the legal description because using that number is an easy way to look up the property in county records.

The legal description is also sometimes called the "metes and bounds" description. The legal description is NOT the same as the street address.