The basic contract terms in an earnest money or sale contract include the following:
•Exact complete legal description of real estate
•Purchase Price (including deposit or “earnest money”)
•Contingencies:
o Inspection report acceptable to buyer
o Title commitment acceptable to buyer
o Financing (unless buyer is paying cash or has a commitment for financing in place)
o Other contingencies unique to transaction
•Proration of property taxes, insurance, taxes and utilities between buyer and seller
•Risk of loss between contract and closing. If the risk of loss passes to the buyer before closing confirm the buyer has insurance in place
•Designation of escrow agent
•Delivery of proof of title from the seller (i.e., the deed showing the seller’s ownership)
•Survey acceptable to buyer
•Closing and possession dates
•Cost of sharing of commissions and fees
•Remedies available to either buyer or seller if there is a default
A sample of Texas Real Estate Commission One to Four Family Residential Contract (Resale) form is located at the end of this Chapter.