Top 10 Contingencies in A Residential Purchase Agreement
Real Estate Law: What to Consider when Reviewing a Purchase Agreement
if you’re buying or selling a home, you’re going to be signing a real estate purchase agreement/contract before the sale is complete. Because this is a legally binding contract, it’s important to review every last detail with an expert in real estate law before signing anything. Whether your real estate agent or real estate law attorney reviews (or both) reviews the agreement with you, make sure you know exactly what you’re committing to. This will help you avoid any potential legal troubles regarding the purchase in the future.
Whether you’re the buyer or the seller, here are the top 10 most important considerations to review before signing a purchase agreement:
1. Who Is Required to Sign and Accept the Purchase Agreement?
Typically, the buyer, seller, and their real estate agents will be required to sign the purchase agreement. In some circumstances, more people will need to sign. For example, if you are married, you’ll need to find out if both you and your spouse required to sign the agreement.
2. Are There Any Contingencies Associated with The Purchase?
Two of the most common contingencies can make the sell dependent upon financing or the sale of the buyer’s home. The purchase agreement should state clearly whether the sale is dependent upon these events and state a reasonable time frame for approval or sale.
3. Is the Home Title Valid, and Who Is Responsible for Ensuring So?
The buyer will want to know that the home title is valid and that the seller is legally allowed to sell the home. This may require looking into the title records. The property agreement should state clearly who is responsible for looking into these records.
4. Who Pays the Commission to The Real Estate Agent(s)?
The property agreement should state who is responsible for paying commission to the involved real estate agent(s) and how much. The agreement should also state whether either real estate agent is paid if the sale does not close.
5. What Exactly Is Included in The Sale?
The property agreement should list exactly what land, buildings, furnishings, and appliances are included with the sale to avoid any confusion.
6. When Is the Closing Date?
The closing date is when the buyer can officially take possession of the home. This may be determined by a remaining term on a lease, when the buyer/seller needs to relocate, etc…
7. Who Is Financially Responsible for Home Inspections?
The home buyer and their financing company may require home inspections before and after the purchase. The purchase agreement should state who is responsible for paying for any inspections.
8. Who Is Financially Responsible for The Closing Costs?
Closing costs may include mortgage payoffs, loan payoffs, recording fees, notary fees, escrow fees, title search fees, and more. The agreement should clearly state what these costs are and who is responsible for paying them.
9. Are There Any Restrictions on The Use of The Property?
The purchase agreement should list any restrictions on the use of property or zoning issues so the buyer knows what he can do with the home in the future.
10. Who Pays for The Costs of Any Damages or Repairs that Occur Before Closing?
If termite damage or any other damages turn up in a home inspection, the purchase agreement should state who is responsible for paying these repair costs.
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