In South Carolina residential real estate transactions, one of the first documents to be executed is the contract for sale. This document is typically called the Agreement/Contract: To Buy And Sell Real Estate and sets the transaction and closing process in motion. All of the steps to be taken toward closing are detailed in this document. For a number of reasons, this contract document and any addenda thereto should be fully executed to ensure a smooth closing process.
Put It in Writing
One of the most important reasons to have a fully executed contract is that it is required by law for real estate transactions. Oral agreements are not sufficient to convey real property. According to the Statute of Frauds, a contract for the sale of property must be in writing, so any agreements attempting to convey real property which are not in writing are simply not agreements at all. It is important to note that both the buyer and the seller must sign and initial the contract for it to be enforceable under the law.
Complete All Tasks
Further, all contracts and addenda should be fully executed, which means all tasks mentioned in the contract should be completed. Failure to fully execute the contract and addenda can lead to the confusion of the buyer, the seller, the closing attorney, the lender, and anyone else involved in the transaction as to the terms of the agreement. The contract defines the responsibilities of the parties as to a number of tasks necessary to complete the transaction, such as obtaining the CL-100, obtaining the HOA information, and scheduling any inspections, to name a few. Confusion over these aspects of the transaction can lead to disputes later in the closing process and could delay the closing.
Don't Leave Blanks
All sections of the contract form should be completed. If there are terms set forth in the contract form, which do not apply to the transaction, it is not enough to simply leave spots empty as to those terms. If a section of the agreement is not being used, you should add “N/A” stating that this section is “not applicable” to your contract. Again, this reduces confusion and avoids misunderstandings through the course of the process.
A well thought-out negotiated contract is instrumental in the residential real estate transaction process. Getting it right in the beginning will help to ensure a timely and enjoyable closing.
Published by Mike Freeman on February 20, 2019.