What Are Some Things to Consider When Reviewing a Contract to Purchase a Home?
The most important step of purchasing a home is properly reviewing the purchase contract. The details of this agreement will determine what exactly it is that you buy or sell and how you buy it or sell it. Before signing, make sure that you read the agreement carefully and consider the following non-exhaustive list:
- Is the purchase contingent on other things? For example, availability of financing on acceptable terms or the sale of the house which the buyer presently owns?
- Exactly what is included in the offer? What are the boundaries of the land, the buildings included, and are the furnishings included in the offer?
- When can the buyer take possession of the property? Is this date contingent on anything?
- Who pays for the examination of the title to the property? Who pays for the abstract of title or title insurance?
- Have utilities been installed if the property is newly constructed?
- Who pays for the cost of the survey of the property? Does the lender require a survey as a condition of the loan approval?
- What inspections are required by the municipality? Who pays for these inspections? What disclosures are the seller responsible to provide?
- If a mortgage is to be given, is there a tax or recording fee for the filing of the mortgage. If so, which party will pay that tax?
- If a loan is to be obtained from an outside lender, who is responsible for the payment of the loan closing costs?
- If termite or other damage is found, will the seller pay the cost of repairs?
- Are there any specific restrictions on the use of the property?
- Who bears the risk of loss if the property is damaged prior to closing the deal?
- What entities (such as husbands or wives) are required to sign and accept the offer?
- Are any of the boundary lines in dispute?
- What are the remedies if the buyer or seller defaults under the contract?
- Whose responsibility is it to pay for governmental special assessments that arise prior to closing?
- What type of deed will be conveyed?