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Every part of the property is compliant with the law. There are many complex legal issues and many different people involved in real estate transactions. First, the contract is the most important part when buying or selling a property.

 The main purpose of a contract is to provide written evidence of mutual consent, the consent of both parties to the exchange. Verbal agreements are not binding.

 To be valid, a contract must contain:

  Identification of the parties involved and the agreed price

  A specific “consideration” must be given: something valuable to be exchanged, usually money

  Signature of each party involved

 There are checks and balances to protect people in all situations and the entire system. Ratings are used to ensure that the property is worth what the lender and seller have claimed. The valuation prevents shady transactions between investors and mortgage brokers from being blocked. Commercial real estate has its own laws of use and sale.

 If tenants live on the property, there are special laws to protect the landlord and tenants. Lenders are governed by the law based on how much they can lend, what documents and insurance are required, and how they market their funding programs. Knowing the tax laws or seeking professional advice is important as this will have a huge impact on your success in real estate investments.

 Mistakes are costly, and protecting yourself can help you make decisions that will improve your bottom line, rather than harm it.