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Time is very important in a real estate transaction. There is usually a period of time between the signing of the contract and the transferring of the title. Chances are the property being bought and sold will be okay during that period. But what if something does happen to it? There’s always the possibility of partial damage or complete destruction. This factor—and it should always be borne in mind—is called “risk of loss."
The risk of loss matter should be stated and clarified in the sales contract. The contract should state whether the buyer or seller bears the risk of damage or loss to the property. Generally speaking, this should be the risk of the seller. It is
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