What a Contract Must Have
To be legally binding, the contract can be anything from a handwritten note on a dinner napkin from a local restaurant to the fanciest of printed forms. There is some information that must be included in every contract, but any contract can include almost everything. First, here are the essentials.
The following six items must be included in the contract:
Date. A contract must be dated to be a legal instrument.
Names. That means the full names of all of the buyers and all of the sellers — Mary and Thomas Jones of 142 Eaton Lane, Bayberry, Connecticut 06439, not John Jones et ox (which means “and wife”). If, for example, three former fraternity brothers are buying a house, then all three names and addresses must be listed on the contract.
Price. The full purchase price should be listed; that is what you are agreeing to in the contract.
Address of the property being sold. A street address is acceptable, unless there are no numbers on the houses — in which case you'll need at least a block and lot number from the local tax map. If you are buying a condo or a co-op, be sure the apartment number and the building number, if necessary, appear in the contract, along with the street address.
Date and place of closing. This is a date that is frequently changed, but naming a place and time to transfer the property is an essential part of an agreement to purchase.
Signatures. Each person who rightfully owns and is selling the property and each person buying that property must sign the contractual agreement. If any one signature is missing, the agreement can be invalidated.
Ask your real-estate agent for a blank contract to take home and look over at your convenience. You can make sure you understand all the details before it's time to draw up your own contract.