What exactly is involved in a real estate contract? Here’s a breakdown of what most contain, although the exact structure might vary based on your location.
What: A legal description of the property as well as the street address.
How much: The selling price.
Mortgage contingency: Subject to obtaining a mortgage (if applicable) and the specifics of the mortgage–and, rate and term. Application to be made in X number of days.
Deposit: How much money accompanies the contract and who will hold it.
Closing: When and where. Inclusions and exclusions: What is and is not included in the sale of the property.
Home inspection: Contingency for and to be done in X number of days.
Warranties: Any that are included with the house and description of the warranty.
Condominium: If the property is a condo, other provisions will apply.
Well and Septic: If applicable, they must be tested (and pass).
Termite and Pest inspection: Who will pay and if there is infestation or damage, who will repair. Possession Date: When the buyers take possession of the house — before, at or after closing. Acceptance: How long the sellers have to respond to the offer with either acceptance or a counter-offer. Arbitration: Any provisions for arbitration of disputes.
Insurance: Whose insurance covers the property up until the closing date?
Property Disclosures: Notices of any property disclosures concerning the house.
Closing the Deal
After getting financing and finding a place you really like, the home buying process may only be half over. The home must still be inspected and appraised, and once that happens, you can start negotiating the price and closing the deal.
Inspecting a Home Before Buying a Home: It is vital to have it inspected by a qualified, independent house inspector. A house inspector will check over the physical condition of the home to make sure you are not buying something that will need expensive repairs in the near future. For information on how to do your own preliminary inspection, what inspectors look for, and how to find a home inspector in your area, go to:
http://www.msmoney.com/mm/life_purchases/home/closingthe_deal.htm, Home Inspection Super Sitehttp://www.msmoney.com/mm/life_purchases/home/closingthe_deal.htm American Society of Home Inspectors.
Closing the Sale: Another critical precaution to take before buying a home is to have an attorney who specializes in real estate law check the papers. You are about to sign a contract that will last for up to 30 years, so you want to make sure there are no mistakes, omissions, or costly details that you have overlooked. It will be a few hundred dollars well spent. If you are trying to reduce your closing costs, there are several tactics. The most effective would be to find a no-points loan. Though you’ll probably have to pay a higher interest rate, it will save you money upfront. If the house inspector reveals any unfinished repairs or potential problems, these are good reasons to lower the price of the home. Look over your final settlement sheet for any questionable fees–ask for an explanation of each.