What’s In Your Contract To Purchase A Home?

Finding the home you love at a price you can afford can be a memorable moment. Now, you must get the seller to agree to your offer. When they do, a contract is created where you agree to buy the home at a certain price and under certain conditions. This contract may be one of the most important documents you'll ever sign, so read on to find out more about the power it holds and what to expect when you read it.

What to Expect With the Purchase Contract

The main thing a home sales contract contains is the agreed-upon sales price. That is the price you offered and the seller agrees to accept. In some cases, it might be the counter-offer you agreed to pay them. Once you sign and agree, you have a legally- binding contract to purchase the home for that price from the seller. Besides the price, you can expect to find some of the following provisions in most sales contracts (though they may vary from location to location).

  • Legal information about the contract. This part of the contract can be confusing, so ask your real estate agent to explain things to you. In most cases, the language used describes the legal ramifications of the contract and tend to be printed on all real estate home sales contracts in that state.
  • The names of the parties. That is you and anyone buying the home with you and the sellers. In some cases, you may be buying the home from a corporation or other entity rather than a person. Also, those selling a house owned by a deceased party may do so under the guise of "the estate of".
  • The address. Legal addresses may differ from a street address and both may be present on the contract.
  • Closing information. The closing is a meeting where all concerned parties appear to sign the formal paperwork that completes the home's sale. The lending, taxes, title insurance, and other closing actions are performed. In the end, you get the key to the home. Closings are usually scheduled a few weeks after the contract to purchase is signed and the contract may also contain an estimate of what the seller and the buyer can expect to pay at closing time.
  • Contingencies may be mentioned. Contingencies are things that must be done or the contract may be canceled. They can include anything from repairs to boilerplate entries about the home being empty.
  • Finally, earnest money is a deposit provided by the buyer to secure the contract. It's a percentage of the home's value and may be refunded if the contract falls through. If not, it goes toward closing costs or the down payment. To find out more about the contract to purchase a home, speak to a real estate agent.

Contact a real estate agent for more information regarding family homes for sale