Reviewing A Home Purchase Agreement
As we all know, purchasing a home is one of life’s most important – and complicated – moves. One must secure financing. One must find that perfect house, that perfect fit. One must examine the house with a critical eye.
Yet the most important step in buying a home just might be completing the purchase contract. Much – what home you buy or sell; how you buy or sell it – is contained in the agreement. So before signing, read the purchase contract closely and consider the following list of questions provided by the American Bar Association:
These are just some of the questions. Again, do your homework and make sure the purchase contract is exactly as you wish.
- Is the purchase contingent on matters such as the availability of financing on acceptable terms or the sale of the house which the buyer presently owns?
- Exactly what land, buildings and furnishings are included in the offer? Are appliances, certain fixtures and other personal property included in the purchase price?
- When can the buyer take possession?
- Is the seller required to provide good, marketable title? Marketable title is title that can be readily marketed (sold) to a reasonably prudent purchaser aware of the facts and their legal meaning concerning liens and encumbrances.
- Who pays for the examination of the title to the property in the event the offer is accepted? Who pays for the abstract of title or title insurance?
- Have utilities been installed if the property is new construction?
- Who pays for the cost of the survey of the property? Does the lender require a survey as a condition of the loan approval?
- What inspections are required by the municipality? Which party will pay for the inspection? Will there be a home warranty contract paid for by the seller? Should the purchaser conduct and pay for a separate home inspection? What kinds of disclosures is a seller required to provide to a purchaser, and what happens if those disclosures are not provided?
- If a mortgage is to be given, is there a tax or recording fee for the filing of the mortgage. If so, which party will pay that tax?
- If a loan is to be obtained from an outside lender, who will pay the loan closing costs?
- If termite damage is found, will the seller pay the cost of repairs?
- Are there any restrictions on the use of the property?
- If your offer is accepted, who bears the risk of loss if the property is damaged prior to closing?
- What persons (such as husbands or wives) are required to sign and accept the offer?
- Are any of the boundary lines in dispute?
- What are the remedies if the buyer or seller defaults under the contract?
- Are there Realtors® involved? If so, who pays the commission? Is the commission payable even if the sale does not close?
- Whose responsibility is it to pay for governmental special assessments that arise prior to closing?
- What type of deed will be conveyed?
The following are key issues to consider when reviewing a home purchase agreement.