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A Virginia real estate contract is a contract that is used by potential home buyers to make an offer on a property that is for sale. Once the seller receives the offer, they can either counter offer or accept. If the offer is accepted, the real estate contract will dictate how the rest of the real estate transaction will be handled.
Real estate contracts include pertinent information about the property and the sale. It is common to find the following information in a Virginia real estate contract:
A real estate contract becomes legally binding and enforceable once it is signed by both parties.
Real estate contracts are most commonly used for the purchase and sale of residential real estate like a single family home. In Virginia, there are two contract templates used to facilitate these sales.
Under the Code of Virginia, all real estate contracts must be in writing. In addition, for a contract to be legally binding and valid, it must contain the following 4 essential elements:
Disclosures in real estate are conditions or defects in the property that the seller must inform the buyer about before the sale can move forward. Most states require sellers to provide a disclosure statement as part of the real estate contract process. Some states follow the “buyer beware” principle and do not require seller disclosures. In these states, the buyer must do their due diligence to find issues with the property.
Virginia is technically a “buyer beware” state, however the Virginia Residential Property Disclosure Act (VRPDA) requires the seller to provide disclosures for certain issues. While Virginia sellers do not have to disclose every issue and defect, the VRPDA requires the following disclosures in a real estate contract:
For any other property conditions or defects, for example a cracked foundation, it is the responsibility of the buyer to conduct adequate home inspections to find the issues.
Under certain circumstances, yes a buyer can back out of a real estate contract in Virginia. Under the Virginia Code cancellation of sale laws, a buyer has three business days to back out of a real estate contract for any reason. After three days, the buyer will need a valid reason to back out of the contract like an unmet contingency or a termination clause.
Contingencies are conditions within the contract that must be met for the sale to move forward. Common contingencies include the buyer securing financing or the house passing a home inspection. If these contingencies are not met, a buyer can usually back out of the contract without legal or financial repercussions.
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