Oral promises aren’t quite going to be enough when it comes to something as intricate and expensive as a home purchase. Besides that, they are not legally enforceable when it comes to real estate. Therefore you’re going to need to write up a contract that actually is enforceable. This is known as a “Purchase Agreement.”
What exactly should the Purchase Agreement contain?
The Purchase Agreement, if accepted, will become an binding sales contract. It is therefore important that it contains clear instructions on all the items and agencies involved in the purchase. These items generally include:
- Address of the property to be acquired.
- Purchase price.
- Terms of the deal. (Is it an all cash purchase, or is it subject to obtaining a loan for a given amount or selling your current house before purchasing the new one?)
- Seller’s promise to provide clear title.
- Target date for the close of escrow and date property will be turned over.
- Amount of earnest money deposit accompanying the offer, and how it’s to be returned to you if the offer is rejected or kept as liquidated damages if you back out for no good reason.
- Instructions as to who will pay for title insurance, termite inspections, home warranty and escrow fees, and what companies are to be used.
- A disclosure stating which agents and brokers are representing the buyer and the seller.
- Type of deed to be given.
- A time limit after which the offer will expire.
Next month we’ll review tips on just how to make your offer a strong one.
If you’re ready to start the process of purchasing your first or next home, call me today to set up an appointment. 310-722-5959.
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