Just the Facts, Mack

For Starters

A Contract to Purchase MUST Include:

• Names of both parties (buyer and seller).
• Address, title reference, and description of the property.
• General listing of buildings, structures, improvements and fixtures that are included in the sale. This list should include appliances (washers, dryers, etc.) and new carpet or a paint job.
• Title Deed with notations about any restrictions, easements (rights of others to use your property or a part of it), and other rights or obligations.
• Approved plans that have been recorded in advance with the seller. This should include a clear transfer to the buyer.
• Registered title, if required in your state.
• Amount you will pay, spelling out the deposit, escrow, and the remainder due at settlement.
• Clear statement of the escrow agreement and who should receive interest from the account. This also should include a buyer�s default that clearly states that the buyer gets the escrow account should the sale not go through as planned.
• Time and date of the closing, including the location at which closing will occur.
• Clause stating that you, as the buyer, will take over possession of the property without any tenants or occupants, and that you will have the opportunity to inspect the property prior to closing.
• Clause stating that the seller will have 30 days to clear up any problems that occur with the title.
• An agreement for you, the buyer, to accept the title of the property even if something impairs it. This means that if there is a lien or encumbrance of any kind, you can still take the property and deduct the amount of the lien from the purchase price. Or the seller may leave money on the table to compensate the buyer for the lien amount. If there is a natural disaster or fire, you can take the property and be compensated from the insurance money.
• Statement indicating that the seller agrees to maintain a certain level of insurance (usually negotiated between parties) to cover the cost of repair should something happen to the property, such as fire or other disaster from the time of contract through closing.
• Clause stating that you will accept the deed once the seller has met all the duties and obligations of the contract.
• List of expenses, like water or electricity, that must be prorated for the portion of the month the seller used the home prior to closing. You will be credited these amounts at closing.
• Estimate of unassessed or abated taxes for the year. These will be based on last year�s taxes.
• Formula for calculating the brokers� commissions and the amount.
• Names of the brokers and warrants that they are licensed.
• Statement that the brokers are part of the contract.
• A spousal release, unless the party is divorced or widowed, which would indicate that the spouse gives up any rights to the property.
• Description of any warranties or promises the seller makes to the buyer about the condition of the property.
• All contingency clauses (see section on contingencies below).
• Legal statements that establish the contract as a legal and binding document.
• Mention of federal or local regulations required in real estate contracts in your area. This may include such things as a lead paint statement.
• Identification of any additional riders.

Let�s PAUSE for a Moment ��Take a Deep Breath

Whew! That was a lot to absorb. Making sure that each of those details is spelled out is one reason many people prefer to hire a real estate attorney to help protect their interests during this aspect of going to closing. We�ll talk more about that later�Are you ready to continue? Now we�ll dig a little deeper into what contingencies are and how they affect the contract.

Contingencies, Contingencies...

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