7 Things You Need To Know About Home Purchase Contracts

A purchase contract can seem daunting, to say the least. However, it’s important you know as much as possible so that you know what to expect. The last thing you want is for a deal to fall through because you didn’t understand the contract.

Contingencies Protect the Buyer

Contingencies are usually based on finances. For example, the buyer may request that the offer be based on obtaining financing. Another example is the contingency of the buyer being able to sell their current home. Regardless, contingencies are put in place to protect the buyer from getting stuck without the funds to pay for the purchase.

Buyers Have So Many Days to Get Things in Order

The contract will also state how many days the buyer has to be approved for financing and to get a home inspection completed. It’s important to pay close attention to these dates or you could lose the house.

Closing Costs Can Be Paid by the Seller

Closing costs vary from state to state. When paying closing costs, the seller usually pays 1 to 3-percent. While this may not seem like a big amount, it’s money that you don’t have to pay and can also help buyers and sellers come to an agreement when negotiating the price.

It Can Be Requested That the Seller Fix or Provide Funds to Have Repairs Made

Another important section of the purchase contract is that which lists repairs that need to be made on the property. These repairs may have been noticed by the buyer, such as damaged siding, or may be something that appeared in the home inspection, such as a bad furnace. Either way, these repairs can be addressed in the contract and the buyer can ask for money for the repairs or that the seller make the repairs before closing.

Sellers Must Vacate the Property within 30 Days of Closing

The closing date can be difficult to negotiate, especially if the seller is still living in the home. In some cases, the buyer and seller agree to a closing date, but the buyer allows the seller to stay in the home for an additional amount of time. However, the seller must vacate within 30 days in order for the buyer to assume owner/occupant status.

Interest Rates May Be Lowered Due to Seller Contribution

Points can be purchased to lower the interest rates on a loan. This money must be paid upfront. If the buyer doesn’t have the funds on hand, he can ask the seller to pay the costs. That way, the interest rate drops so that the mortgage payment is more affordable for the buyer.

Other Requests Can Be Made in the Contract

Last, but not least, buyers can make other requests in the purchase contract. An example is asking the seller to include the furniture, above ground pool, hot tub, etc. The buyer may even ask that the seller provide money for purchasing appliances or installing new flooring.

The home purchase contract may seem like a lot of legal jargon, but you need to understand what the contract is asking of you and how it can help you. If you’re working with a real estate agent from Louisville Homes Fast, you can often find referrals for legal counsel if they’re needed. Whether you’re local or not, ask your agent for help!