Writing The Contract

In most communities there is a locally-accepted standard that has been adopted for a real estate Contract of Sale. Your agent will provide this form, and you can make any changes to it that you desire before presenting it to a Seller. You can also use a different contract format, if you prefer; just remain aware that it will become a legally binding document, so you should have it reviewed by a reputable attorney before you make a commitment on it. Sellers and their agents will be uncomfortable with an unusual contract format, too, and they are likely to make stronger counter-offers than if they were confronted by a more familiar design.

A real estate contract needs to include an accurate description of the property, the Buyers’ correct names, and the price you are offering. You can write a contract for less than or equal to the Sellers’ asking price (and in rare cases, you may even offer more than the asking price). Your contract will also include your financing conditions and deadlines, a proposed Closing date and any contingencies that should apply to the purchase. It will probably be accompanied by some amount of cash consideration or “Earnest money” which will be held in escrow until the sale is completed. This escrowed money will be applied toward the purchase, unless the contract fails to close.

Your agent will recommend that you include in your contract that you have the right to a professional property inspection (at your own expense) that will evaluate the true condition of the property, from the roof to the plumbing & electrical systems, all the way down to the stability of the foundation. You may also include a provision that you have a right to do a final “walk-through” prior to closing so you can be sure the property has been properly repaired and maintained to your satisfaction just before you sign the final documents.

Review every single line of the contract and any amendments before you sign and send them to the Sellers. Be sure you understand your obligations before you sign the Contract. If you have left out anything important to you, correct it now; you may not get a chance to ask for it later. Your agent should go over the provisions with you to be sure your interests are protected. At this point, the negotiations will begin. Ultimately, you will reach mutually agreeable terms and the sellers will sign their acceptance. You are now on the way to home ownership!

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