If you’re preparing to enter into a contract with a real estate agent in Alabama, it’s essential to understand all the terms and conditions specific to the state. Fortunately, Heights Title has you covered! Our expertise will ensure you navigate the contract process with confidence.
Real Estate Contract Terms To Know
Throughout this article, we’ll go over the common real estate contacts in Alabama and all the contact terms you need to know.
Common Alabama Real Estate Contracts
Real estate contracts in Alabama come in many forms, but three of these are the most common. These three types are:
Purchase Agreement
Purchase agreement contracts are the most common type of real estate contract. Basically, they lay out all the terms and conditions in detail to transfer a pacific property from a seller to a buyer.
Lease Agreement
Sometimes called a rental contract, a lease agreement contract holds the essential terms and regulations to allow a tenant to use a specific property from its landlord.
This contract is for when you’re not ready to buy your own property at the moment or if you’re just living in a certain place for a short while and you don’t want any property ownership commitments.
Real Estate Assignment Contract
Last but not least, there’s the real estate assignment contract. This type of contract is used when your property is a wholesaling investment strategy. When a buyer signs an assignment contract, they’ll be able to assign that contract to another buyer later on.
Essential Terms of an Alabama Real Estate Contract
Based on the Alabama property laws, For any agent in Alabama to make a real estate contract legally enforceable, they need to include four essential elements. These elements include:
Property Description
The agent must ensure that the property’s exact address and every little detail is mentioned clearly within the contract. The seller must provide a thorough legal description of the property to have it written in the contract. Otherwise, the contract will be faulty and illegal.
For example, the contract should include information like the number of bedrooms, bathrooms, and the total area of the property — including backyards, front yards, and gardens.
Price and Terms
This is where both parties discuss finances. The final price of the property, which both the seller and buyer agree to, goes in this section. Additionally, it should include the terms on which the buyer will pay the agreed-upon price.
Whether it’ll be cash, in installments, or any required deposits, every financial detail must be mentioned clearly in this section of the contract.
Closing Date and Costs
This is the date when both parties, along with their agent, finalize the sale. For the contract to be legally binding and enforceable, it needs to mention the date on which the deal is finalized and who’s responsible for the closing costs.
These closing costs could include the fee of your attorney or agent, application fee, courier fee, or even an escrow deposit. The list goes on and on. So all of these details must be mentioned in the property’s contract.
Required Disclosures
In Alabama, sellers are legally required to disclose any facts they know that might affect the value of the property they’re selling. They must fill out a lead-based paint disclosure — for properties built before 1978 — and a property disclosure statement.
The property disclosure statements urge the seller to inform the buyer of any issues in the property, especially if it’s an underlying infection like mold, termites, or any pests.
Frequently Asked Questions
Does the Real Estate Law in Alabama Allow Me to Backout of a Contract?
Yes. In fact, you can back out of a contract during multiple phases of the buying process. As a seller, you could back out at the beginning when you don’t accept the buyer’s offer or before you sign the contract.
As a buyer, you’re free to cancel your agreement and get a full refund as long as you do so before midnight on the third business day after you sign the contract.
Are Verbal Contracts Legally Binding in Alabama?
No, the law only recognizes formal written contracts, and they supersede any verbal ones. The reason behind that is to prevent fraud and illegal acts.
Why Should You Hire a Real Estate Agent in Alabama?
Real estate contracts may be confusing, and you can easily get lost in all the paperwork. Real estate agents do this for a living. They’re qualified professionals who can check all the fine print to help you reach an agreement that fits well with your needs.
Heights Title Is Here To Help
Before you sign a real estate contract to purchase a property in Alabama, it’s crucial to fully understand your legal documents. If it feels overwhelming, don’t hesitate to seek assistance from professional real estate agents. Contact Heights Title today, and let us guide you through the intricacies of your real estate transactions for a smooth and secure experience.