A properly written
contract sets forth the terms of the sale and protects the interests
of both buyer and seller.
The contract specifies
the terms of the sale and the rights and obligations of the buyer and
the seller. A well-written document protects both parties, while a poorly
drafted contract can cause serious problems.
it in Writing
Oral agreements are usually difficult or impossible to enforce,
so if you've negotiated your purchase verbally make sure to have contracts
signed as soon as possible.
Always make sure
that any contract you sign has an attorney review clause that allows
you time (at least three business days - preferably five) to review
the document and have it checked out by your lawyer if you feel it is
necessary. Many states specify a mandatory review period, whether it
is specified or not, but don't take any chances - make sure it's in
writing. This gives you the chance to make sure all bases are covered
before you are committed.
an Attorney or Escrow Company
In some areas
it is standard practice to retain an attorney to handle the closing.
In others the norm is to have the title or escrow company handle the
transaction. If you do hire an attorney (which is a good idea), try
and find someone local who specializes in real estate closings. An experienced
real estate attorney can help you move quickly to closing and sidestep
any problems or oversights. If you are using an escrow company, make
sure that they have a solid track record.
Make sure that the contract covers all contingencies of the purchase
and allows sufficient time for any required activities or testing (i.e.
obtaining a mortgage, home inspections, etc.). Reasonable contingencies
are essential to protecting yourself in the purchase - don't allow anyone
to pressure you into skimping on due diligence.
About Deeds and Title
The deed is a legal document that transfers ownership of the home. There
are several types of deed that can be used for your purchase as well
as a number of special provisions that may apply to your new home. Your
attorney or escrow agent can answer any questions you have on title
Your Deposit Obligations
The contract should specify the due dates and disposition of earnest
money and deposits. Typically a small amount is posted at the signing
of the contract with the balance of the deposit (usually 10% of the
purchase price) due within 1-3 weeks. Don't agree to a schedule you
cannot meet - if you need extra time to line up the funds, specify this
in the contract.
to this page since March 30, 2004