Many people might argue that investing in real estate is one of the most interesting and exciting ways to save for your retirement and create a steady stream of current income today. Let’s face it, lots of people are addicted to real estate investing! I’ll admit that I’ve been swept up myself in the past.

One thing about real estate investing that makes it different than other forms of investing, such as the stock market for instance, is the fact that real estate investments are much more complicated especially when it comes to closing the sale. If you’ve ever been to a closing then you know what I’m talking about!

There is a sort of mad flurry of paperwork shooting out every which way. There’s papers on the table, there’s papers coming out of briefcases, there’s papers on the floor, there’s papers being passed around from you to the buyer to the seller to the broker to the lawyer back to you again. Initial here; initial there; sign here, and sign there… it can very quickly turn into a madhouse which is why you want to be as familiar as possible with real estate contracts before you go into closing.

That’s why I thought I’d write this article today and explain a few simple clauses that you should expect to see in a regular real estate contract. Hopefully you’ll be able to familiarize yourself with them here and therefore get a leg up when it comes time to battle during closing.

The first clause I want to talk about is the condition precedent clause. This basically says that the purchaser or the seller may want one of a few specific events to occur before a certain obligation becomes fixed. That may be confusing so let me try and give an example. Say the purchaser wants the town to approve building a new park next to your building and you refuse to purchase the building until the town has agreed to build the park.

Once the town has built the park, the purchaser will now be contractually obligated to purchase the building from the seller. You get the idea… these things will be spelled out in the condition precedent clause and obviously this clause won’t be present in all contracts.

The building permits clause is the next one I want to talk about. This is similar to the last clause in that you may require the seller to make sure the building permits are up to date or that the zoning is approved by the city before you purchase the building. These sorts of things will be spelled out in the building permits clause.

Brokerage fees clause. Most people don’t realize that brokerage fees are negotiable and not only are they negotiable between you and your broker but they can even be negotiable between you and the seller. They state which of you has to pay the fees or if you share the fees or any combination of the two. This will be spelled out in detail in the brokerage fees clause section of your contract.

Well fortunately I’ve only touched on three clauses today in this article but hopefully at least they will give you a heads up so that you understand a little bit what to expect when it comes to real estate contract clauses.

Jason Markum has been an article writer online for well over 13 years. When he’s not writing articles, he has a good time running a dinnerware pfaltzgraff web site where he also reviews stoneware dinnerware sets for your home use.

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