Real estate can be a complicated business; there are so many details and wrinkles you have to iron out before you can actually move into a new home. From hiring an agent, to finding the perfect dream home, not to mention the financing process and making an offer to buy, finally getting to the contract stage can be time-consuming and complex.

But when you make a formal offer to buy the home you want to buy, you’ll end up reading and filling out a bunch of paperwork that spells out the terms of your offer. Aside from obvious things like the address and purchase price of the property, here are some more nuanced items you should be sure to include in yours real estate contract of sale. In legal terms these are called unforeseen events which are written into your real estate contract.

What is a real estate contract?

A real estate contract is a legally binding agreement between two or more parties that describes the terms for the purchase, sale, exchange or other transfer of real property. This includes land and any structures attached to it.

1. Financing conditions

Most people simply aren’t financially secure enough to make a cash offer on a home – and chances are you’re one of them. That means you have to take one out mortgage. But before you make your purchase offer, make sure you research the interest rate environment and where you fit into that scenario in terms of your existing debt and credit score. Your offer to purchase should only be conditional on obtaining financing at a specified time interest.

This point is very important, and here’s why: If you know you can’t afford the monthly payment on the house if the interest rate is higher than 6%, don’t put 6.5% or more in your offer. If you do and can only get financing at 6.5%, that is seller get to keep yours serious money deposit if and when you have to back out of the offer.

If you need to obtain a certain type of loan to complete the deal, e.g Federal Housing Administration (FHA) or the United States Department of Veterans Affairs (VA) loan, you should also state this in your contract. If you are paying all cash for the property, you should state this as well as it makes your offer more attractive to sellers. Why? If you don’t have to take out a mortgage, the deal is more likely to go through, and the deal is more likely to close on time.

2. Sales assistant

If you want the seller to pay for part or all of your closing costsyou must ask for it in your offer. Closing costs are usually expenses above the property price that both buyers and sellers pay to complete a real estate transaction. When you enter a concession for a seller’s assistance, you ask the seller to cover some of these additional costs.

A seller’s assistance is almost like a credit, where the seller agrees to absorb some of the extra costs that a buyer would normally have to bear. While it seems strange that a seller would pay a fee to sell their house, it is quite common. Sometimes a buyer may also be willing to pay a little extra for the home if the seller agrees to pay more for closing costs. It all depends on how motivated each party is and how well they negotiate.

The offer should state the closing costs you are requesting as a dollar amount, say $6,000 at closing, or as a percentage of the home’s purchase price, such as 3%. The size of the seller’s assistance depends on the entire purchase price for the property.

3. Who pays specific closing costs

The agreement should state whether the buyer or seller pays for each of the usual fees associated with the home purchase, such as blocked fees, title search fees, title insurance, notary fees, recording feestransfer tax and so on. Your real estate agent can advise you on who usually pays each of these fees in your area – the buyer or the seller.

4. Home inspection

If you don’t buy a teardown, you should include one home inspection unforeseen in your offer. This clause allows you to walk away from the deal if a home inspection reveals significant and/or expensive to repair defects in the structure’s condition. These are handled differently depending on where you live – different states and cities have different laws dealing with home inspections.

A home inspector will walk through the property and examine it for structural problems or damage. If they are unable to assess the damage, they may recommend an inspector who specializes in a particular area to enter the home. This can include electrical, pest and lead based paint inspectors.

Remember, this is a very important part of the home buying process, so it should not be overlooked or taken lightly. Say an inspector walks through your prospective home and discovers that the property needs a new roof at a cost of $15,000. If you don’t have the money to cover the replacement, home inspection contingency gives you the ability to walk away from the deal because it’s a costly expense. In some cases, a seller may be willing to charge the cost of the repair, or credit it against the purchase price.

Most contingency contracts come with home inspection clauses, but if yours doesn’t, check with your real estate agent.

5. Fixtures and appliances

If you want a refrigerator, dishwasher, stove, oven, washing machine or other fixtures and appliances, do not rely on a verbal agreement with the seller and assume nothing. The contract must state any additions that are negotiated, such as fixtures and appliances that must be included in the purchase. Otherwise, don’t be surprised if the kitchen is bare, the chandelier is gone and the windows are left without coverings.

6. Last date

How much time do you need to complete the purchase transaction? Common time frames are 30, 45 and 60 days. Issues that can affect this time frame usually include the seller’s need to find a new home, the remaining time on your rent if you are currently renting, how long it will take you to move if you are moving from a job, and so on.

Sometimes the buyer or seller may want one closing as short as two weeks or less, but it is difficult to remove all contingencies and get all the necessary paperwork and financing in such a short time. Often the delays are not the buyer or the seller, but instead the bottleneck occurs with the lender or guarantor, the title company or the attorneys.

7. Sale of existing home

If you are an existing homeowner and need the funds from the sale of that home to purchase the new property, you should make your purchase offer contingent on the sale of your current home. You should also specify a reasonable time frame for selling your old home, such as 30 or 60 days. The seller of the property you are interested in will not want to take their property off the market indefinitely while you search for a buyer.

Many other things are included in a thorough real estate contract, but for the most part you shouldn’t have to worry about them. Real estate agents typically use standardized forms that cover all the bases, including those described in this article.

A common form in California is the California Residential Purchase Agreement and Joint Escrow Instructions document produced by the state real estate agent compound. If you want to familiarize yourself with the details of the purchase agreement form you’re likely to use before you write your offer, ask your real estate agent for a sample agreement or search online for the standard form common in your state or locality. If you are looking for a good deal and have time to wait, a short sale house may be something for you.

Bottom line

While these forms are common and standardized, and a good realtor wouldn’t let you leave anything important out of your contract, it’s still a good idea to educate yourself on the key components of a real estate purchase agreement.

While it’s never easy to walk away from a home — especially if you’re set on it — there may be times when you have to do just that. Remember, if any of the contingencies in your contract are not met, you can cancel the deal and keep your deposit – all without spending anything but time. The conditional contract, you will find, is one of your most important assets you will have in a real estate transaction.