- 1). Identify the parties to the contract, using photo IDs. Identify each member of a trust or partnership, if these entities are involved, and identify the company representative if a corporation or limited liability company is involved. Ask for documentary proof that the representative has the authority to sign on behalf of the company. Add the social security numbers of individual parties and the employer identification number of parties that are business entities.
- 2). Describe the property and state the purpose of the agreement. A street address is not enough, because street addresses can change. Look at the title document to see how the property is described, and use that description. If the title contains no description, go to the local land records office and ask to see the listing for the property. The listing will probably describe the property in terms of a plat number or a surveyor's description measured in metes and bounds.
- 3). List the amount of earnest money to be paid by the purchaser, the conditions under which it will be returned and the identity of any third-party escrow agent, advises Lawyers.com. Earnest money is the amount deposited by the buyer that will be forfeited if the buyer fails to proceed with the closing.
- 4). Set forth the total purchase price to be transferred to the seller at the closing. Add a brief description of the buyer's financing arrangements.
- 5). Record any warranties offered by the seller. Typical seller's warranties include a guarantee that marketable title will be transferred to the buyer at the closing and that the seller will bear all related expenses such as repairs and property taxes arising before the closing date.
- 6). List the date and time that the buyer will present the purchase price and the seller will transfer title. This is known as the closing date. If the buyer is entitled to cancel the closing in the event he cannot arrange financing, this fact should be listed. This section should also require both parties be represented by separate attorneys at the closing.
- 7). State the date the buyer will take possession of the property, advises Lawyers.com. This normally occurs immediately after closing.
- 8). Add contractual housekeeping clauses, such as dispute resolution methods and a prohibition against assignment of the contract by either party.
- 9). Add a signature line. Each party's name should be used along with the entity that he is representing, if any. The signature line should also make clear which party is representing which entity and that a representative party is not signing in his own name.
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