“A real estate contract is a contract between two parties for the purchase and sale, exchange, or other conveyance of real estate,” according to Wikipedia here. It is generally referred to as a bilateral contract, meaning it is between two parties: a buyer and a seller.
Real estate contracts must be in writing with original signatures of both parties. A legal description of the property in question is a good practice.
A property title or land title is a legal document that shows the ownership of a piece of land or property that belongs to a person.
An abstract of title is a condensed history of the ownership of a piece of land. Ownership is traced through public records. In the United States, it furnishes the raw data needed to provide title insurance for a property.
A deed is a written legal instrument that transfers ownership of real estate property. The real estate contract typically does not actually transfer the ownership or title of the land. Instead, a deed is used to convey the title of the property from one owner to another. There are different kinds of deeds for different purposes.
There are many different kinds of deeds for purchasing properties. The most common are general warranty deeds, special warranty deeds, quitclaim deeds, bargain and sale deeds, and grant deeds. A bank or lending institution will usually insist on a warranty deed, because warranty deeds promise the buyer that the title is free and clear from encumbrance. Deeds must also be notarized, filed and witnessed to be valid.
Cancelling a real estate contract is not often done and can be quite complicated. There is a “3-day right of rescission” period during which you can customarily back out of a contract, but that only applies to residential property.
Consult an experienced real estate attorney before buying or selling real estate to be sure your best interests are adequately protected. Attorney L. Lynn Lawrence is an experienced real estate attorney.