The Home Purchase Agreement
The home purchase agreement used by The Lesti Team, while it is tailored to each transaction, is based on a form designed by the National Association of Realtors ®, the local Association of Realtors, or a private publishing company. All changes made by you and your Realtor must be approved in writing by the seller.
In the U.S., a written purchase agreement signed by all parties involved is required if the agreement is to be considered an enforceable contract. The Lesti Team cannot even present your offer to buy without it being in writing and signed by you.
Everything in the offer must be perfectly clear.
Elements in the home purchase agreement should include:
· Sales price
· Deposit. Although the amount can vary, it is usually 1-2% of the purchase price. It will be credited toward your down payment or closing costs, or returned if your offer is not accepted. Note, however, that you run the danger of forfeiting your deposit if you drop out of the agreement against its terms.
· Clear Title. This very important provision requires the owner to turn over possession clear of any 3rd party claims against the property. Note: The responsibility for paying for title insurance is something that can be negotiated.
· Mortgage Clause. This element specifies that the sale of the home is contingent upon the buyer obtaining the loan. If the loan is unattainable, there should be a refund of the deposit.
· Pest Inspection. Pests? Dry rot? You won’t know what you’re getting into without a professional inspection.There needs to be a clause specifying who should pay for eradication and repairs if there is a problem.
· Home Inspection. It’s a good idea for you, the buyer, to pay for a home inspection by a licensed professional so you can be assured the report is objective and accurate. The cost is usually between $300 and $700. This is something that should definitely be a requirement in your home purchase agreement. The general inspector might recommend additional inspections of specific structure elements or systems.
· Contingencies. Every specific condition set forth in the purchase agreement must be met prior to closing. Note: in a slow market, home sellers are more likely to accept a greater number of contingencies. Your conditions should be important and necessary, however.
· Escrow Company. The escrow company acts as the title firm, provides title insurance, and is customarily chosen by the buyer. The title insurance may be paid by either party, however.
· Closing Costs. Although local custom usually dictates who pays closing costs, the expenses are negotiable between buyer and seller.
Withdrawing An Offer
Consult The Lesti Team regarding any possible ramifications of the withdrawal of an offer. Often it can be done up until the point at which it is accepted by the seller.
Seller’s Response to the Offer
A counter offer by the seller should be expected. If it does occur, you have the right to either accept it or return it with modifications. There is usually an opportunity for negotiation. It’s important to remember that the agreement does not become legally binding until it is accepted and signed unconditionally by both the buyer and seller. When signed and all contingencies are subsequently met, you can relax until the closing of escrow.