Even if your real estate contract has been written on toilet paper, it's valid.

WHAT your contract says is what's important.

Your financial destiny on a transaction is sealed BEFORE you walk into a real estate closing. You have set in concrete your profit before you turn the door handle to enter the office of your attorney or title company. Your profit was determined when you and the other party signed the contract.

The meaning of all this is that you must recognize the importance of the contract that ties together the property transaction.

When we strike a deal, we usually just reach for some pre-printed contract form that came from a real estate office or stationary store. We usually forfeit our closing rights to some stranger who put together certain traditional activities and processes without recognizing that we ourselves have the right to charter this course. And we usually utilize the same form for purchasing or selling real estate.

The first order of business in writing contracts is understanding that any sale or purchase of property is negotiable. Without specifications in your contract that dictate your directions, the closing agent simply resorts to customary procedures. You can actually INCREASE your profits on a transaction by the wording of your contract. But these settlement terms must be in writing on your Contract. Otherwise, profits fly out the window.

One of the most euphoric feelings I have ever experienced in this business of real estate investing was walking out of a closing with a check payable to me for $75,000 on a package of a few cheap properties! As with anyone, I had a use for that cash!

Even much more cash-at-closing is available on more expensive houses or commercial property.

I am not giving legal advice in this article, and you should consult an attorney about your contract. I am suggesting that you should shake hands with several attorneys specializing in real estate as you start your investing business, and select a legal partner for your venture. You need his advice for numerous decisions, including structuring transactions as well as writing contracts, but you don’t want to go broke paying legal fees. Often you can get an attorney's review of your documents by offering to stipulate him as your closing agent in your Contract. He will pick up his profit on his closing fees and title work, and his minimal advice should be his contribution for bringing more money into his practice.

But your request for legal advice needs parameters. Do your homework before you get to his office, and don't lean on him as your instructor. He will respect your requests for advice, only if you are prepared with the important details in advance. He wants to know that you know what you are doing. And you should keep your requests for advice to a minimum.

When you begin your real estate investing career, you won't be knowledgeable enough to write your own contract. You will rely on pre-printed standard forms. And that's OK. Even after you are ready to write your own contract, of course it won't be on toilet paper. You will want it approved by your attorney to determine its legality, and then you might have copies produced at a print shop. You may even have a Purchase of Real Estate Contract and a Sale of Real Estate Contract (with "Purchase" and "Sale" applying to you). The content of these two Contracts will not be identical.

The negotiable items in a settlement are the key issues in developing a personal contract.

Sure, you can hand-write many conditions into a standard contract, but a much more thorough job can be accomplished in a pre-printed format.

If you use a real estate agent, you as the Seller DO NOT necessarily have to pay the agent’s fee, even though this is a customary practice. And even if you choose to pay the fee, it does NOT necessarily have to be a customary fee for your area, unless it has become binding by a law (which is not usually the case). Real estate fees are negotiable. It’s OK for the Buyer to pay the agent’s fees, if you can demand it with justification! Agents often agree to lesser fees if you as the owner/seller are more involved in the selling process, or if you are giving them increased business by selling some or all of your properties through them. Just remember too that brokers always insist on getting their cut of the pie, even though you may be working through a broker's agent.

Other negotiable closing costs include court house recording fees and the transfer of insurance premium. If you are buying a property, nothing prevents you from asking the seller to transfer insurance coverage to you rather than pro-rate it, which is customary. Nothing prevents you from asking for the existing refrigerator, stove, the window air conditioner, the seller’s tools in his workshop or even his car! Non-realty items which are not attached or a part of the property are not normally included in a sale, but a request is not exempt from the negotiating table. Common sense and the need to sell usually determine what you ask for in your contract, if you are the buyer of a property.

In fact, nothing prevents you from asking the Seller to pay ALL closing costs.

And if you are selling a property, nothing prohibits you from asking the Seller to pay all closing costs, including recording fees, agent’s commissions, and even appraisal fee.

EVERYTHING is determined by negotiation and the desire of the buyer for your finished product.

But of course, any Contract must be reviewed by a real estate attorney and adjusted to comply with your own particular State laws.

The point of this article is not to become greedy, but to recognize the flexibility of negotiation in buying and selling real estate, and the inherent right to structure contracts which reflect your personal mode of business.

Dr.Phil Speer