Reviewing a Real Estate Sales Contract
Reviewing a real estate sales contract
The real estate sales contract may look like many pages of legal talk which only lawyers could understand. It is actually not that complicated. There are many terms listed which you may not understand. We are going take a look at a few of them.
As you can see, the obvious is stated, who is buying the property from whom. It also lists the property address as well as the legal description. This is for everyone's protection. There have been times when a property was offered for sale at a particular address. The transaction took place and the deal was closed. Later it was discovered the property sold was actually adjacent to the one on the contract. This has actually happened quite often with vacant land. By using the legal description on the real estate sales contract there is no doubt which property is involved in the transaction. The purchase offer is also listed along with any down payment, or earnest money, the buyer may have put down. The terms are spelled out here as to when the buyer will obtain the loan and how much the loan will be for. You will find a date for closing in this area as well. The closing date is given as an approximate. This is because circumstances may arise which could delay the closing. This is taken into consideration. There could be a section about the appraisal of the property, depending on how your contract reads.
You will find information on the sales agreement about inspections. This is because every buyer has the right to have the home inspected before the contract is finalized. This is encouraged because there could be hidden damage that no one knew about. Things like termites and other infestations can be checked for with a quality inspection. Many times the seller must have a termite inspection done before closing.
The real estate sales contract will have a warning clause for the buyer. This is the "As Is" terms the buyer is purchasing the property under. He or she has the right to have the home inspected. Any thing which is not addressed in the contract or during the inspection becomes an "as is" issue. The seller can not be held responsible for any damages unless it was proven the problem was known and not disclosed to the buyer. For instance, if the basement floods every year and no one said anything, the seller can be held responsible for taking care of the problem.
The real estate sales contract will list any options the buyer wishes to add. For instance, they may ask the seller leave the appliances or other things. They can also ask the seller to pay certain closing costs or hold a note for a set period of time. There may be other terms the buyer may wish to add.
The seller has the right to reject the contract completely, accept it as is, or counter with an offer of his own. The seller can ask the purchase offer listed to be higher, if it is not the asking price. This is where the negotiations come into play. Not every real estate purchase contract is accepted the first time it is submitted. Negotiating the deal is not unusual. It is acceptable to ensure both parties are happy with the agreement. This is why the real estate sales contract usually states at the top that it is a real estate purchase agreement.
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