Thursday, February 18, 2010
When it comes to buying a house, the contract seems simple enough. It basically says that the house will be bought by certain terms, how much the seller will receive and who is paying for what.
However, there are many details that you shouldn't overlook.
When you Realtor writes your contract, it is very important that everything be correct, down to the last detail. A lot can happen if a box is checked that shouldn't be or one isn't checked that should be. If the contract isn't complete or the addendum is left out, there could be trouble in the future.
These little details could end up costing you a lot of money, or could completely ruin your contract. For example, a seller is looking for the money and the correct terms. What seems like a little item can get your offer rejected in a competitive situation.
You will want to go through the contract before it is presented to make sure that the written terms are what you are offering and agreeing to. Make sure that you pay attention to every little detail. Some of the most important items are:
1. The inspection.
There are many inspections that buyers can request. The most important is having the home go through a complete home inspection by a professional. This is usually as simple as a check in a box. Make sure that the box is checked. And if you are requesting a pest, termite or environmental inspection, make sure that you include it in the contract. Or you will probably be out of luck.
2. Various disclosures.
Many disclosures are required by law. The buyer and seller will have to sign plenty of disclosures, such as the property disclosure, lead based paint disclosure, RESPA disclosure, disclosure of brokersage relationship and many other disclosures. Make sure you understand what you are signing before you sign it.
3. Other terms of the agreement.
Some of the most common clauses added to a contract are escalation, home of choice and rent back agreements. You want to make sure that these are included. For example, if you are escalating your price, you need to put what your top price is. Don't just say that you will best any other offer by $2,500 without writing down the cap on your offer. Never assume anything.
If you aren't wanting to become homeless, you may want to stipulate in your listing agreement that you want to find a home of choice and wish to rent back from the buyer so that you have time to find your home of choice. Don't just make it an endless amount of time. Be smart, and polite, and stipulate to the buyer how much time you will need. Most purchasers are only allowed to get a mortgage and rent back for 60 days. You may be putting their loan at risk if you want to rent beyond that time period.
Don't simply read over the contract the hour before it is to be presented. Sit and read it completely. Know what it says and what it will require of you. Discuss with your Realtor exactly what you want so that you are prepared when it comes time to write that contract.
Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!