What To Look For In Your Property Contracts
Let’s be honest with one another, buying a house, or any property of that kind of nature can be exciting, to say the least. In all this excitement, it is easy to lose focus on what is really at stake. For starters, there is a lot of money and emotion involved. Most first time buyers get so excited about finding their ‘perfect first home’ that they hardly ever give the purchase contract as much thought as they should. This can open them up to serious liability.
To be frank, contracts are often boring pieces of paper filled with legal jargon of which only solicitors can make heads and tails. As a regular chap without a law degree, the best course of action is to hire legal help when dealing with them. As much as your solicitor will help you navigate those boring-choppy waters, you should also arm yourself with a little knowledge on the subject. You know, so you do not get lost at sea.
Here are some things that you should look for in a contract.
Basics of a property purchase contract
To simplify matters, we are going to list some of the most basic things that your contract should contain:
- The legal names and addresses of both parties involved (the seller and the buyer).
- A thorough description of the property being sold. This should include the exact property measurements and address.
- A list of things that will be included as well as excluded in the sale (furniture, light fixtures and so on).
- The total property buying price which should include the deposit.
- The kind of financing involved. Mortgage or any other financing terms.
- All the necessary inspection reports.
- Property taxes involved as well as any other adjustments.
- Comprehensive details of the sale and purchase.
You should be very careful when reviewing the terms of the settlement. These will outline who pays for what exactly and within what kind of time frame. There are some contracts that stipulate that the seller will pay for the inspections and most of the other common fees such as title search fees, title insurance, transfer taxes and so on. As much as you may think that the price of the house is the biggest financial hurdle you have to deal with, these other fees can quickly add up to a substantial amount as well. It is, therefore, imperative to be clear on who will handle which fees.
Another issue on which you must be clear is the closing date of the deal. Different contracts offer different closing date terms and periods. Typically, the sale should take about a month or even 60 days to complete. Of course, this period depends on a number of things that are not constant. These things include:
- Various necessary repairs
- The sellers need to find a new home
- Remaining lease terms and so on.
Your contract doesn’t have to read like lawyer speak for it to be legal and binding. In fact, simplified contracts are gaining popularity with property investors like Rick Otton providing sharing instructional videos on how it’s done. Just remember that these simplified forms must pass through your solicitor and the solicitor of the other party to verify the details.
As stated, every property sale is slightly different and your solicitor should be able to walk you through the contract at hand. As exciting as this time may be, you are advised to take a beat and review the contract whilst clear minded and with professional guidance.