What items should be included in a real estate purchase contract?
Buying a home requires careful planning, particularly when it comes to signing a contract with the seller. In order to protect your interests, there are certain items that should included in the agreement. While most real estate purchase contracts contain standard terms, it is important to know what to look for before you sign on the dotted line.
Key Terms of a Sales Contract
For most individuals, buying a home typically involves arranging for financing with a mortgage lender, and any offer should be contingent upon your loan application being approved. In particular, you should specify the interest rate in the contract to ensure that you can afford the monthly obligation. If a lender comes back with an offer for a higher rate that you cannot afford, you may be forced to back out of the deal, and lose your deposit in the process.
Another key consideration in a real estate purchase contract is which party will pay specific closing costs. In some cases, a motivated seller will agree to pay part or all of a buyer's closing costs (often referred to as a seller's concession), but this should be specified in the agreement. If there is no seller concession, it is important to specify which party will pay escrow fees, title search fees, title insurance, notary fees, recording fees and the like.
Obviously, it is crucial to have the home inspected to ensure the dwelling is structurally sound and that the heating, cooling an electrical systems are in good order. If the inspection reveals that significant repairs may be needed, the seller should agree to pay for them or, in the alternative, you should be able to back out of the deal.
Many homebuyers mistakenly assume that fixtures and appliances come with the home, but this may not be the case. Rather than relying on a handshake, the contract should specify that the refrigerator, dishwasher, stove, oven, washer/dryer, and any other fixtures are included in the deal.
Finally, it is essential to establish a closing date that plans for a number of contingencies such as whether you are selling an existing home, or whether the seller needs to find a new home, and other time constraints that could delay the closing and possibly kill the deal.
Before you sign a real estate purchase contract, you are well advised to consult with or experienced attorneys. If you have questions on purchasing a home in the eastern upstate New York area, call Ianniello Anderson at (518) 350-7755 today.