First-time home buyers account for 33% of all home purchases in the United States.
These buyers place all their trust in real estate agents to help them find their dream homes. Also, they rely on the realtors to handle the house purchase agreements on their behalf. Unfortunately, real estate agents are humans, and they make mistakes.
When buying a home, knowing a thing or two about the house purchase process is prudent to catch any mistakes that might arise.
To help you out, here are five things to include in a real estate purchase agreement.
1. Identifications of Parties and Property
A purchase agreement must identify the buyer(s) and the seller(s). If there’s more than one buyer, the contract should state whether they’ll act as joint tenants or tenants in common. Also, it should have details of the house being sold.
Consider consulting a real estate attorney from a reputable firm such as Soble PLC to know about purchase agreements. The idea is to learn how different types of purchase agreements work and which one to use.
2. Good Faith Deposit
To show your seriousness in buying a house, the seller will require you to put down a good faith deposit. The purchase agreement should have a clause on this deposit. It should state whether this amount will be part of the final house acquisition price or not.
3. Price and Terms
A purchase agreement should specify the house price the seller and the buyer agree on. Also, it should state whether the buyer will pay in cash, a new mortgage, or another arrangement involving an existing mortgage.
The seller and the buyer have the power to add conditions that must be met before the sale goes through. As the buyer, add a house inspection contingency to protect yourself. The idea is to have an agreement that requires a third party to inspect the property you’re buying.
So, you’ll have the option to exit the agreement if the house inspection results are unsatisfactory. Consult a real estate attorney to know other key contingencies to add to the purchase agreement.
5. Closing Costs and Date
The agreement should list all the house closing costs and who’ll pay for them.
Here are some of the most common closing fees:
- Title search fees
- Escrow fees
- Title insurance
- Notary fees
- Transfer tax
- Recording fee
If the seller agrees to pay for any of the above fees, a seller assist note should be added to the agreement.
Get Legally Binding Real Estate Purchase Agreement to Avoid Problems
Buying a house is a smooth process when you have a legally binding real estate purchase agreement. So, before you sign a purchase agreement, ensure it has all the above things. Ensure the contract specifies the house price and terms.
Also, the purchase agreement must include the closing cost and date.
Please check our other blog posts for more fantastic house buying and real estate tips.