What do I look for in a real estate contract?

03 Feb, 2020

On Behalf of Mack & Mack Attorneys | real estate

Real estate contracts contain a number of provisions and details that you might gloss over if you do not know what to look for. Good real estate offers, while they provide protection for the seller, should also shield you as a buyer from certain costs and issues that may arise from the purchase of a new home. The following will give you a look at what you should look for in a real estate offer.

Sfgate.com explains that generally, you would want an inspector to go through a home as a real estate purchase moves forward. A real estate offer should contain an inspection provision that allows a buyer to hire someone to go through the house to find problems and describe ways to repair them. This enables you to ask a seller to fix the problems so that repair costs do not come out of your pocket.

A warranty provision is something else that may protect you. In the event something goes wrong with a home after you have purchased it, a home warranty clause may reduce some of the costs of repairing the problem. You should check to see if the contract has this provision even if the advertisement for the home included a warranty offer. If a warranty offer is not present, you may ask the seller to include one as part of your deal.

Some home buyers get close to purchasing a home, but for some reason, their bank fails to approve their loan. Without the financing, a buyer has no choice but to pull out of the deal, which can cost the buyer earnest money. A loss of financing may also cause problems if the contract binds the buyer to buy the home. A financing contingency clause can protect a buyer, requiring the buyer to receive back earnest money and set aside contractual obligations to buy the property.

Real estate contracts may also contain closing cost provisions. At the closing of the sale, some buyers end up responsible for appraisal costs, escrow fees, and/or loan fees. However, some real estate offers place the responsibility for these costs on the home seller. Buyers may find this attractive and can request a seller to include this provision in a contract.

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