a preliminary real estate contract is the first legal step toward purchasing your home. a real estate contract is a legal agreement. the purpose of a preliminary real estate contract is spell out the terms of sale agreed by the seller and buyer. it gives both parties the security of a legal agreement, whilst giving each of them time to clear the title of liens, carry out a home inspection and appraisal, and organize funds for the sale before the actual closing. many residential contracts are drafted in basic, common form, enumerating essential terms such as the name of the parties, the property and the price. specific and unusual terms are typically transcribed in an addendum, which is signed at the same time as the principal contract and attached to it. as a minimum, a preliminary contract contains the full names and addresses of the parties; the address of the property and its legal description; the price to be paid and the method for payment; and the closing date.
the contract will require the seller to deliver a transfer deed at closing. usually this is a warranty deed, which contains certain representations by the seller about the validity and marketability of his title. typically a homebuyer does not get final approval on a home loan until the purchase contract is in place, so a contingency is used to make the transaction conditional upon the buyer securing the loan. other common contingencies relate to the property appraising at or above the purchase price, or passing a home inspection in a manner that is satisfactory to the buyer. once the contingencies in a contract are satisfied, neither the seller or the buyer can walk away from the contract without legal penalty. a court may order specific performance to compel the parties to complete the transfer. jayne thompson earned an llb in law and business administration from the university of birmingham and an llm in international law from the university of east london. she practiced in various “big law” firms before launching a career as a commercial writer.
in our previous article we talked about real estate due diligence. first of all, the buyer will have to make a purchase offer. at this point, the parties will have to sign a preliminary contract of sale (contratto preliminare or compromesso). this contract outlines the terms and conditions of the sale and the requirements that have to be met. it has to be noted that this is contract obligates both parties to sign the final contract.
therefore, prior to signing a preliminary contract, it is extremely important that it is examined by a competent person in order to avoid unpleasant surprises for both the seller and the buyer. the preliminary contract of sale must be registered at an italian tax office. at this stage, the buyer will have to pay part of the fees in advance but this amount will then be deducted from the total which is due when both parties sign the final deed before the italian notary public. it will be included in the final contract of sale (rogito), which marks the completion of the property transaction. if you decided to invest in italy, we suggest you to seek the help of an italian professional. in fact, we are aware that if you reside abroad you may not be able to travel to italy to sign the purchasing contract.
the function of a preliminary real estate contract is to set forth the general terms of sale agreed to by the purchaser and seller. the contract is signed this preliminary contract for purchase and sale of real estate can be terminated before the term set after mutual agreement of both parties. in such case, the the “contratto preliminare di compravendita” (preliminary sale and purchase agreement), also called “compromesso”, is – like an offer to purchase – a, pre sale agreement template, pre sale agreement template, preliminary real estate contract, house sales agreement pdf, agreement for sale of property.
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