A listing agreement is a contract between the sellers and their broker wherein the seller agrees to compensate the broker for services performed in offering the property for sale and procuring a buyer. In addition, the listing agreement contains a general description of the realty and a specific description of the contents of the home, e.g. range, washer and dryer, etc, which are or are not included in the sale. It is therefore important that both prospective sellers and purchasers be clear about what is or is not included in the sale.
The Purchase Contract
In Connecticut an agreement to purchase real property need only describe the property generally, contain the terms of the sale, e.g., price and payment, provide for a specific closing date and be signed by both buyer and seller in order to be a valid and enforceable contract. This agreement is the most important document in the entire transaction. In some areas of the state buyers and sellers execute these agreements without the aid of attorneys using forms provided by real estate brokers. In other areas, it is the custom to execute a "binder" designed to hold the property from sale pending the preparation by attorneys of a formal contract. Where a party executes a contract before consulting with an attorney, it is generally beyond the attorney's power to change or modify the terms of the contract except by mutual consent of the parties. Therefore, whenever possible, it is desirable to consult with an attorney prior to entering into any contract.
Finally, certain types of contracts, such as those involving the purchase of a unit in a common interest community, are governed by laws requiring the disclosure of specific information and the rights of such purchasers.
Among the items to be negotiated in a purchase contract, in addition to the price, is the type of mortgage the buyers will need as a condition of purchasing (i.e., the "contingency clause") and how long they will have to obtain a commitment from a lender to provide such a mortgage. Other items include date of occupancy, the type and effect of inspections to be done, and the responsibility for loss in the event of catastrophic damage to the property.