Finding an ideal home can be exciting. But that’s only the beginning of the purchase process. You and the seller will sign an agreement confirming the transfer of ownership and other terms of the deal. You should go through the contract carefully to avoid deals that may disadvantage you later.
Below are three things to check:
Earnest money
Earnest money is the deposit you will pay to show the seller you are serious about completing the purchase. It’s typically expressed as a percentage of the purchase price. Before signing the contract, confirm the price is as negotiated initially. It’s also important to check the conditions for refunding the money and when the seller can legally keep it.
Seller assist
A seller can help a buyer pay closing costs (expenses above the purchase price for finalizing a real estate deal). Seller assist can free up some money, allowing you to cover other costs, such as the first mortgage payment. That’s why it’s beneficial to ask for it in your offer. If the seller consented, confirm the information is included in the contract before signing.
Since both of you will pay the closing costs, the agreement should also specify who will pay which costs to make the deal more manageable.
Contingency
If you or the seller is required to do something before the purchase is complete, this information should be in the contract. For example, you can request that the seller repair any issues before the purchase. The seller may also ask you to get financing within a certain period and so on.
Contingencies may allow both parties to back out of the sale without penalties.
It’s vital to pay attention to every part of a real estate contract. The above-discussed factors are primary examples. You should also seek legal guidance to understand the agreement in-depth.
