Buyers' Frequently Asked Questions
What is in a Sales Contract?
Your signed offer to purchase is the document you draft which presents your price and terms to the seller. (The name of the document varies. Ask an agent what it is called in your area.) This purchase offer must be complete because when the seller signs it, the document becomes the binding "sales contract" that contains the conditions of the sale. If you forget something in the offer, you usually can't add it to your sales contract later.
Terms and conditions of the contract vary depending on the situation. The following are typical matters you and a seller may negotiate and agree on:
- What items convey with the home, such as chandeliers, appliances, personal property, swimming pool chemicals, etc.
- The sale price.
- The amount of your deposit ("earnest money")
- The amount of your down payment and/or the amount of mortgage loan you intend to obtain.
- The date, time and place of settlement, when you take possession of the home. Be sure you and your seller have a clear agreement about the date of occupancy.
- Any contingencies (agreed upon by you and the seller) which must be met before settlement can take place, such as : improvements (painting, roofing, etc.); termite inspection, proof of clear title to the home; legal review of the contract by either or both buyer's and seller's lawyer(s); your ability to obtain a specified mortgage loan within a specified time at agreed-upon interest rates and points, and/or specified seller financing.
- Your signature and that of the seller. (Remember you can always withdraw an offer until the seller has signed it.)
How do I make an offer?
You, as potential buyer, start the process by putting an offer with price and terms in writing and presenting it to the seller through an agent. Buying a home is probably the biggest financial investment you will make. Only you can decide which home you want, and the price is up to you and the seller.
Understand the seller has three basic options: to accept your offer, counter offer on specific details, or reject your offer. If there is any negotiation, it usually takes place trading counter offers, if the seller doesn't immediately accept or reject the offer. Keep up the dialogue until you arrive at the price you can pay and the price and terms the seller can accept.
This is where an agent's help is invaluable. The agent keeps the negotiation process running smoothly. With a knowledge of both your situation and the seller's, plus a complete understanding of financing options, an agent can suggest strategies that bring about a satisfactory transaction.
How do I evaluate a resale home?
Homes with a past have special appeal. An existing home is a settled place (literally): the foundation, the landscaping, the neighborhood, including its services, are about where they're probably going to be for some time.
The home has a lived-in look. Some rooms may be larger than in new homes, woodwork has mellowed, the yard is a generous size. Its price may be lower (per square foot).
The thing to be on the look-out for is wear-and-tear:
- How firm is the foundation?
- How sound are the sills, walls, floors and ceilings?
- What kind of plumbing was installed, and when?
- What's the shape and extent of the electrical system?
- What shape is the heating/cooling system in?
- What are monthly energy costs?
- How well does the insulation protect the indoors?
- What will it cost you to remodel if necessary (especially kitchen and baths) or to make necessary repairs?
- If in doubt - or just for your peace of mind - you can hire a certified home inspector for a professional opinion.
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