North Carolina Real Estate Contract: Different Types and Key Terms to Include

What is a North Carolina Real Estate Contract?

A North Carolina real estate contract, sometimes called a residential real estate purchase and sale agreement, is a contract that is negotiated between a buyer and a seller to facilitate the sale of property. Real estate contracts are most commonly used when purchasing an existing residential home, but can also be used for purchasing commercial property, investment property, and renting property.

A real estate contract lays out the terms and conditions that both parties must abide by in order to finalize the sale. Each party has rights and obligations under a real estate contract. For example, a buyer must meet certain contingencies like securing financing and completing a home inspection. Likewise, the seller is obligated to provide the buyer with information about the property by filling out a property disclosure statement.

Property disclosure statements are required to be included in a real estate contract under North Carolina law. In addition, the seller must also provide a lead-based paint disclosure and a mineral, oil, and gas rights disclosure.

Common North Carolina Real Estate Contracts

The most common North Carolina real estate contract is the residential purchase agreement. The standard contract form used by most realtors is called the North Carolina Association of Realtors Purchase Agreement. This contract is approved by the Association of Realtors as well as the North Carolina Bar Association.

If the transaction doesn’t involve residential real estate, a different contract will need to be used for the sale. Other common contracts include:

• Commercial property purchase agreement. Used when buying or selling a commercial property that is zoned for business purposes like an office building or storefront.
• Real estate assignment contract. Used when purchasing properties for investment purposes. A reassignment contract allows the buyer to assign the contract to a secondary buyer.
• Lease agreement. Use when a property owner wants to retain ownership rights of the property but allow a tenant to rent the property in exchange for monthly payments.

4 Essential Elements of a North Carolina Real Estate Contract

All contracts in North Carolina require essential elements to be upheld in court and considered enforceable. This is also true for real estate contracts. The 4 essential elements of a North Carolina real estate contract are:

1. An offer made by the buyer and acceptance of the offer by the seller.
2. Consideration or the exchange of items of value like money in exchange for a house.
3. The identity of all parties involved, and all parties must be legally competent to enter the agreement.
4. The contract must be in writing and be signed by all parties.

If a real estate contract is missing even just one of these elements, it will be deemed void in a North Carolina court and unenforceable. It is highly recommended that parties entering a real estate contract have their contract reviewed by an experienced real estate attorney. A real estate attorney will ensure that the contract includes all necessary information and abides by all applicable laws.

What is a Real Property Contract in North Carolina?

A real property contract is a contract that is executed between a real property contractor and another party for the purpose of services to real property for capital improvement. A capital improvement is a permanent structural alteration or repair to real property that increases the property’s value.

A real property contract differs from a real estate contract because a real estate contract is used when buying and selling a property while a real property contract is used to make improvements to a property to increase the value.