So you’ve finally decided to take that first big step in buying a home – congratulations! But there’s a lot of paperwork involved prior to a purchase so before signing on that red dotted line; make sure to keep a lookout for the following terms to avoid making any huge investment mistakes.
Price and terms
One of things you should thoroughly read in your contract is the final price and the terms at which you will pay for it. The contract should clearly outline the method agreed upon by the agent and the buyer. This can come in different forms –from paying full in cash, to giving a down payment and settling the rest of the costs through mortgage payments.
Closing costs generally refer to the fees included in your home purchase and are paid at the closing date of the transaction or the date at which the property will be turned over to you. It’s very rare that the seller covers part of these costs but the division of expenses should be clearly stated in the agreement. Make sure to go through this list properly and clarify any items not clear to you.
Excluded or Included Items
Don’t set yourself up for disappointment and make sure you know exactly what you’re getting out of your contract. Most agreements will include a list of what is included in the property sale. This can include a variety of things from light and bathroom fixtures to window treatments and other furnishings. Remember, just because you saw it in the showroom, doesn’t mean it’s included in the sale.
Make sure to go over this item with your seller. As with any new purchase, you must be diligent about the quality of the product you are buying. A good seller will be honest about the property they are selling but it’s not uncommon to withhold information that will turn buyers off. If you’re seller is dodgy and is in a hurry to sell the property, chances are he’s hiding something.
When buying a home, make sure to cover all bases by putting contingencies in place. The three most common types of contingencies are finance, inspection and appraisal contingency.
Finance contingency allows the owner to back out of the deal when he or she doesn’t get the necessary financing. This also allows him or her to earn back money from the initial deposit. Meanwhile, the inspection contingency gives the buyer the right to hire a third-party agency to inspect the property. If the agency finds any fault, the buyer can also back out of the deal. Last but not the least, the appraisal contingency is when the lender, most often times a bank, checks if the price offered by the seller equal to the amount of the property in the market. It’s an extra few steps but having these contingencies in place will ensure peace of mind for not just the buyer but even the seller.
These are only some of the few important things to look out for in a real estate contract. But even before negotiating with the seller, don’t forget to check their track record and do an ocular inspection. These basic things go a long way in making the right purchase decision.